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. Basic Materials Sector

    A category of stocks that accounts for companies involved with ...
  6. Spark Spread

    The difference between the market price of electricity and its ...
RELATED FAQS
  1. 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 >>
  2. 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 >>
  3. 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 >>
  4. 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. Stock Analysis

    Cheaper Solar Power Gets Some Major Backers

    While solar hasn’t lived up its potential, the times are changing. New investment has surged. For investors, this could be the time to buy solar stocks.
  9. Mutual Funds & ETFs

    Why This Small-Cap Utilities ETF is Worth a Look

    PowerShares S&P SmallCap Utilities ETF (PSCU) has been a winner and it’s likely to remain that way barring a broad market crash.
  10. Economics

    What's Utility?

    Utility has two meanings depending on the context.

You May Also Like

Hot Definitions
  1. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  2. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  3. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  4. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  5. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
  6. Preference Shares

    Company stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a ...
Trading Center