Utilities Sector

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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.

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RELATED FAQS
  1. What options strategies are best suited for investing in the utilities sector?

    There are a number of option strategies an investor can use to take a position in the utility sector, depending on whether ... Read Full Answer >>
  2. 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 >>
  3. 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 >>
  4. 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 >>
  5. 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 >>
  6. 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 >>
  7. 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 >>
  8. 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 >>
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