Utilities Sector

AAA

DEFINITION of 'Utilities Sector'

A category of stocks for utilities such as gas and power. The utilities sector contains companies such as electric, gas and water firms and integrated providers.

INVESTOPEDIA EXPLAINS 'Utilities Sector'

Because utilities require significant infrastructure, these firms often carry large amounts of debt. With a high debt load, utilities companies become sensitive to changes in the interest rate. As interest rates rise or drop, the debt payments will increase or decrease. The utilities sector performs best when interest rates are falling or remain low.

RELATED TERMS
  1. Electric Utilities Industry ETF

    An exchange-traded fund that invests in companies which generate ...
  2. Wholesale Energy

    A term referring to the purchase and sale of energy products ...
  3. SEC Form U5B

    A now-obsolete filing with the Securities and Exchange Commission ...
  4. Consumer Cyclicals

    A category of stocks that rely heavily on the business cycle ...
  5. Healthcare Sector

    A category of stocks relating to medical and healthcare goods ...
  6. Basic Materials Sector

    A category of stocks that accounts for companies involved with ...
RELATED FAQS
  1. What level of return on assets should an investor look for in the insurance sector?

    Marketing plays an important role to a company in the utilities sector. Many people fail to understand why utility companies ... Read Full Answer >>
  2. In what way is credit risk analysis beneficial when trading in the stock market?

    Some investors use credit risk in analyzing individual stocks to determine whether a company might be in danger of defaulting ... Read Full Answer >>
  3. What is the average annual return in the utilities sector?

    As of January 2015, the average annual return in the utilities sector for the past 10 years has been approximately 11%, outperforming ... Read Full Answer >>
  4. How does weather impact the share prices of utility stocks?

    The utilities sector is a popular addition to an investor’s asset allocation due to the industry’s above average dividend ... Read Full Answer >>
  5. What ETFs should I buy to track the utilities sector?

    The utilities sector has long been a space for investors looking for dividend-paying investments, especially in a lower interest ... Read Full Answer >>
  6. Are there leveraged ETFs that track the utility sector?

    A couple of leveraged exchange-traded funds, or ETFs , track the utilities sector. One is the ProShares Ultra Utilities (UPW). ... Read Full Answer >>
  7. What is a utility stock?

    A utility stock is a stock for a company that is found in the Utilities Sector. These companies include water, gas, electric ... Read Full Answer >>
Related Articles
  1. Retirement

    Downsize Your Home To Downsize Expenses

    Learn how to cut your mortgage, tax, gas and utilities bills.
  2. Economics

    Trust In Utilities

    Even in times of economic turmoil, utilities can be a good investment.
  3. Active Trading

    Guard Your Portfolio With Defensive Stocks

    Find out how these securities can protect you from a market bust.
  4. Mutual Funds & ETFs

    Water: The Ultimate Commodity

    Opportunities to invest in this scarce resource are flowing freely - dive in!
  5. Mutual Funds & ETFs

    An Introduction To Sector Mutual Funds

    Investing among several different sectors in the economy is a way to diversify your portfolio.
  6. Options & Futures

    Cyclical Versus Non-Cyclical Stocks

    Investing during an economic downturn simply means changing your focus. Discover the benefits of defensive stocks.
  7. Entrepreneurship

    Save Money On Summer Bills

    From lawn care to summer fairs, expenses can skyrocket if you're not paying attention.
  8. Investing

    Feeling Risk-Averse? Consider These Investments

    These investments offer risk-averse investors resiliency to bear markets while paying sustainable dividends or interest.
  9. Home & Auto

    Reduce Energy Costs By Making These Adjustments

    There are several ways you can reduce energy costs. These techniques range from minor tweaks to major renovations.
  10. Chart Advisor

    Defensive? Eye Infrastructure via the IGF ETF

    Investing in infrastructure is not exactly the flavor of the day, but it may prove useful to turn toward defensive sectors in case of a market downturn.

You May Also Like

Hot Definitions
  1. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  2. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  3. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
  4. Terminal Value - TV

    The value of a bond at maturity, or of an asset at a specified, future valuation date, taking into account factors such as ...
  5. Rule Of 70

    A way to estimate the number of years it takes for a certain variable to double. The rule of 70 states that in order to estimate ...
  6. Risk Premium

    The return in excess of the risk-free rate of return that an investment is expected to yield. An asset's risk premium is ...
Trading Center