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What are utility stocks?

Updated: 8/17/2019
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12y ago

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Utility stocks represent the companies that deal with utilities such as electric, water, and gas. These are the most common ones.

Do you know how to become a utility player in the stock market?

Check out an article I wrote here http://bit.ly/nzeqXV .

Let us take this question a step further and understand why you should own utility stocks.

Here are my top four reasons why utilities need to be a part of your investment strategy:

  1. Utilities normally pay a consistent and oftentimes growing dividend.
  2. There are many types of utility companies; electric, water and gas are the most common. Due to the fact that these industries are virtually impossible to live without, they provide stable earnings and therefore can be very stable stocks.
  3. Historically, they have proven to be a great hedge against inflation.
  4. Utility stocks are often a mainstay in many portfolios, and are typically the last industry group to be sold in a portfolio during slow and negative markets. This characteristic gives many people comfort during draw downs in the market.
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