Hauppauge, N.Y. (PRWEB) July 09, 2012
Target Rock Advisors, LLC (TRA) today released the second quarter update of its ten energy utility industry Sustainability and ESG (Environmental, Social and Governance) Indexes. Most utility stocks performed well in the second quarter as investors continued to seek relative safety and current income, but socially responsible utilities outperformed the sector as a whole.
Socially Responsible Utilities Continue to Outperform
“Virtually all utilities beat the broader market for the three-month period 4/1/12-6/30/12, so barring any heavy exposure in the small handful of declining utility issues it was hard not to make money in this sector this quarter, said Target Rock co-founder Kyle Rudden, “but investing in more socially responsible utilities would have produced even higher total returns.”
The sector as a whole did well as investors continued to seek relative safety and current income. The TRA Composite Utility Index generated a total return of 5.6% for the quarter, slightly higher than those of the S&P Utilities, Dow Jones Utility Average, and Philadelphia Utility Index. The TRA Composite Utility Index is slightly more representative of more traditional, regulated, stable, dividend paying utilities than other utility indexes which in some cases include lesser-regulated merchant generators and midstream natural gas companies.
However the best performing indexes for the period represent the industry’s performance leaders in key areas of social responsibility: TRA High Sustainability Index produced a three-month total return of 7.7%, while the TRA High ESG Index and TRA High Environmental Index returned 7.1%.
“Our analysis has demonstrated a fairly consistent positive long-term relationship between sustainability performance and stock market total returns,” said Kyle Rudden. “The relationship is strongest over longer periods and doesn’t always hold up over shorter time periods, but the second quarter of 2012 is one in which it did.”
All but one of the top five performing utilities for the quarter are components of the TRA High Sustainability Index: Sempra Energy (14.9%), Progress Energy, Inc. (13.3%), NextEra Energy, Inc. (12.7%), and Wisconsin Energy Corporation (12.5%). Hawaiian Electric Industries, Inc., which is in the TRA Medium Sustainability Index, returned 12.5%.
About the Target Rock Indexes
The indexes include the equity securities of publicly-traded, U.S. domiciled energy utilities that were previously scored and ranked using the TRA sustainability assessment process, as described at http://www.targetrockadvisors.com.
The Target Rock family of indexes is designed to provide both socially responsible and traditional investors with utility sector specific performance metrics on the basis of which they can tailor their investment portfolios to meet both financial and social responsibility objectives.
More information is available in the report titled “Sustainability Index Update, Second Quarter 2012: High Sustainability and ESG Utilities Outperform” at http://www.targetrockadvisors.com/research-reports/ and information about Target Rock’s other utility sustainability rankings can be found at http://www.targetrockadvisors.com.
Note: Total return calculation assume that dividends are taken as cash payment and not reinvested. This may account for any differences between total returns calculated by TRA and those calculated by others.
About Target Rock
The indexes discussed in this release are one important component of Target Rock's products and services. Target Rock is dedicated to the rigorous study and implementation of sustainability policies and practices within the utility and financial industries. The Company’s mission is to provide data, information, analytical systems and deep sector-specific technical expertise that identifies areas for improved performance and helps utility companies achieve their sustainability objectives with favorable social and economic outcomes. Through its partners and associates, Target Rock has over 250 years of combined experience in sustainability and executive leadership, equities and fixed income analysis, financial management, statistics and econometrics, regulatory policy analysis and management consulting.