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Entergy is a holding company with five regulated integrated utilities that generate and distribute electricity to about 3 million customers in Arkansas, Louisiana, Mississippi, and Texas. It is one of the largest power producers in the country with 24 gigawatts of rate-regulated owned and leased power generation capacity. Entergy was the second-largest nuclear owner in the US before it began retiring and selling its plants in the Northeast in 2014. It plans to sell its two small gas utilities in Louisiana.

GE Vernova is a global leader in the electric power industry, with products and services that generate, transfer, convert, and store electricity. The company has three business segments: power, wind, and electrification. Power includes gas, nuclear, hydroelectric, and steam technologies, providing dispatchable power. The wind segment includes wind generation technologies, inclusive of onshore and offshore wind turbines and blades. Electrification includes grid solutions, power conversion, electrification software, and solar and storage solutions technologies required for the transmission, distribution, conversion, and storage of electricity from the point of generation to point of consumption.

Brookfield Renewable is a globally diversified, multitechnology owner and operator of clean energy assets. The company's portfolio consists of hydroelectric, wind, solar, and storage facilities in North America, South America, Europe, and Asia, and totals over 20 gigawatts of installed capacity. Brookfield Renewable invests in assets directly, as well as with institutional partners, joint venture partners, and through other arrangements. The company offers two separate listings for investors: Brookfield Renewable Partners LP and Brookfield Renewable Corporation.

We have reviewed our recommended sector allocations this month, and have adjusted our current sector over-weight, under-weight, and market-weight recommendations for the calendar fourth quarter of 2024. Our multi-factor model includes a performance-ranking system, which assigns points for monthly, quarterly, and YTD sector performance versus the benchmark S&P 500; current sector P/E vs. five-year P/E, with points awarded for a discount to the S&P 500 current P/E; two-year earnings growth, with points awarded for exceeding the benchmark average and for EPS acceleration; relative performance to the sector group average; sector conviction based on the Argus BUY rating percentage; and PEG ratio, with points awarded or subtracted based on sector PEG ratios below or above the group average. This time, our process led to an upgrade of the Utilities sector to recommended over-weight from market-weight. Utility stocks have been positive throughout 2024 in anticipation of lower interest rates, and the sector has blasted off in the third quarter as that possibility became a likelihood. We also expect the Utilities sector to benefit from providing the power needed by the fast-growing AI data center market. Our rebalancing process takes place four times a year, early in the months of March, June, September and December. We suggest that advisors and investors leverage this consistent and comprehensive process to adjust sector weightings within their diversified equity portfolios, with a primary focus on the largest sectors.