Power producers, the best-performing stocks over the past 12 months, last week led the Standard & Poor’s 500 Index to its highest since September 2000. Purchases by hedge funds such as Caxton Associates LLC and SAC Capital Advisors LLC, combined with $173.4 billion in utility takeovers this year, helped fuel the rally.
The record pace of mergers and acquisitions is obscuring a drop in dividend yields on shares of U.S. gas, electric and water utilities to 2.86 percent, near the lowest ever, according to data compiled by Bloomberg.
The average yield for power companies worldwide last month fell below both U.S. and European interest rates for the first time since September 2001. Some investors are taking notice: firms overseeing about $12.3 trillion were net sellers of utility stocks in April, State Street Corp. says.
