Investors Desperately Seeking Income, Utilities Continuing to Act Well

Utilities are acting once more like the new mo-mo stocks.  Look what just set a post-financial crisis high today, closing on its high and thus moving up as the market rallied into the close:
http://finance.yahoo.com/echarts?s=AVA+Interactive#symbol=ava;range=20040621,20120628;compare=;indicator=sma%2850,150,200%29+volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

It's a small northwestern utility with a P/E that's "cheap"- under 17 LOL.  But the payout is 4.4% and people want that good stuff.  Meanwhile P/E's on techs are shrinking and P/E's on a growing number of energy companies are less than 10X TTM.

One factor that actually makes sense in this rush for seemingly secure dividends w/o regard for growth is the tax treatment of foreign earnings.  The foreign earnings of all multi-nationals is not able to be paid out to shareholders as dividends until they come back to the U.S. and get taxed.  Thus a dollar of domestic earnings are worth somewhat more than a dollar of foreign earnings.  That issue notwithstanding, the fact is that utility earnings are not necessarily predictable.  Therefore their dividends are not necessarily secure either.  I have a massively overweight position in utilities in my IRAs.  Avista is one of them.  VVC, Vectren is another.  The charts are in break-out positions and unlike the new premature faves, the homebuilders, they actually have investment merits in the here and now.  The homebuilders will have their day in the sun, but I think they are ahead of themselves.  As was the case with gold and silver in 2009-11, sound domestic electric and natural gas utilities look as though they have more room to run on the upside as investors are increasingly reaching for income.  Con Ed is at $62.  I think $75 is realistic as the months roll by.  Unfortunately Cramer feels the same way, but I've been saying so for awhile.  He does, after all, get some mo-mo stuff right now and then...