Stocks in utilities such as water, electricity, and gas tend to exhibit favorable characteristics that attract retirees and other income investors. Such stocks tend to offer above-average yields, moderate risk, and above all: high dividends. The reason for these benefits is mainly due to the incredibly low elasticity of demand utility companies typically face, regardless of the economic climate. Even during recessionary times, households and businesses must still consume power, water, heat, and telecommunication services. Consequently, these companies are more scalable and less volatile than corporations in many other sectors. This translates to more consistent revenue streams that generally produce sizable shareholder dividends.

Utility companies likewise benefit from the monopolistic authority they often wield over their given regions or municipalities. Although the United States theoretically opposes monopolies, utility companies are often permitted to corner markets. Otherwise, increased competition in the space might lead to inefficient and fragmented operations.