What happened

The shares of U.S. utilities Duke Energy (NYSE:DUK), Dominion Resources (NYSE:D), and Southern Company (NYSE:SO) rose 5.2%, 5.5%, and 6.2%, respectively, in October. That compares to a 3.9% advance in the Utilities Select Sector SPDR ETF (NYSEMKT:XLU). Although on an absolute basis the outperformance seems modest, on a relative basis Duke, Dominion, and Southern each had a blowout month.

So what

The thing is, there really wasn't much going on at this trio to warrant such a large relative price advance. Only Dominion reported earnings in October, for example, and even then only in the last few days of the month. (It was fairly boring reading, by the way, with earnings hitting roughly the midpoint of guidance.) Duke and Southern reported in early November. But the gains for all three were spread fairly evenly through the entire month.   

Man in a reflective vest holding a hard hat with an electrical power line in the background

Image source: Getty Images

Overall, the price trend of each utility broadly tracked the utility group. They were just up more than the average. For Duke and Southern that better performance could be a bit of catch-up, since this pair has trailed the utility average for most of the year. (That's due in part to ongoing difficulties with large construction projects.) Dominion's relative strength, meanwhile, could be attributable to a 10% dividend increase announced in mid-October, but the stock didn't appear to react to that news in a significant way.   

At the end of the day, it looks most likely that investor sentiment simply favored these giants over the broader utility industry. That may have something to do with the 4%-plus yields offered by Southern and Duke, and the 3.8% yield at Dominion. These are all robust dividend yields in today's market and well above the 3.1% yield offered by Utilities Select Sector SPDR ETF.

Now what

There's no particular reason to read into Duke, Southern, and Dominion's strong relative showing in October. With no major news in the month, the price changes were more likely about market sentiment than any material change in company fundamentals. The price jumps were surely nice to see if you're a shareholder, but there are no conclusions to draw about the companies themselves.

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool recommends Dominion Resources. The Motley Fool has a disclosure policy.