The Utilities sector consists of companies providing electric, gas or water utilities, as well as integrated producers and/or distributors of power.
The sector encompasses the following industries:
- Electric Utilities
- Gas Utilities
- Independent Power and Renewable Electricity Producers
- Water Utilities
In general, the sector generates consistent recurring income by charging consumers and businesses that provide higher-than-average dividend yields. The utility sector is generally unaffected by economic conditions because gas, electric, and water are considered fundamentally necessary for everyday life. Yet the sector’s performance is greatly affected by geographical characteristics. This is why utility companies are often natural monopolies and also why they’re often highly regulated and held in check by the government.