Utility Industry Analysis, Research & Ratios ► (edit / improve)
Industry Analysis evaluates the major industry characteristics that affect investments. Company specific factors drive the performance of individual companies, but macro-economic factors can affect the performance, stock prices, growth rates, and chart movements of any stock, currency, or commodity. All stock traders should review industry research before trading.
| Description: The utility industry includes companies whose sales come from the administration of public services such as water and power (see full utility description: competitors, industry ratios, best stocks, market leaders, aggregate SWOT Analysis, and streaming industry news).
Profit Analysis: The best way to profit from utilities stock investments is to find the most undervalued investments (Wall Street and Main Street buy ratings) before economic recessions. Those investments should be undervalued (see Wall Street on left side), and have high Main Street Common Sense investment ratings (see Main Street on right side). When an economic recovery occurs, utility stocks tend to underperform the general stock market, because consumers quickly resume spending on items they wanted, but resisted buying during tougher economic times. Utilities are generally items that consumers bought during a recession, but don't increase purchases during economic expansions. Eventually other stock investments become overvalued, because profits and stock prices increase past their fair values. During the last stages of an economic business cycle, just before a recession, it is best to buy utilities stocks, because they are the least risky equity investments in a declining stock market. As investors search for safe (less risky) stock investments, they tend to buy utilities. Expensive (overvalued) stocks with low Main Street Common Sense ratings should be sold at any time to invest in better stocks. Two buys ratings are the best and two sell ratings are the worst possible stock investments. Trading Strategy: Utilities tend to be less sensitive to economic changes. During economic recessions, consumers tend to decrease discretionary expenses to save money, but they can not decrease utility purchases, because they are needed for everyday living. Spending on utilities generally remains constant, so during economic recessions, investors tend to buy utility stocks, which causes stock prices to increase. During economic recoveries, utilities stock prices generally underperform the general stock market. Investor who bought utilities stocks during the recession, tend to make new investments in faster growing industries. During longer economic expansions, utilities tend to grow at the same rate as the general stock market.
1 WikiWealth only uses the largest 30 companies in each industry for the basis of these financial measures. Each statistic is the market weighted average of the 30 companies. 2 Investment potential (margin of safety) is a weighted average of the discounted cash flow (DCF), comparative value, and the Warren Buffett investment. 3 The weighted average cost of capital (WACC) for the industry is a broad representation of the WACC for each individual company. A sub-industry WACC offers both stability and accuracy for each individual company. |
US ETF Funds First Trust Utilities ETF (FXU) Non - US ETF Funds Emerging Utilities (EUT) Cisco Announces Intent to Acquire Arch Rock - MarketWatch (press release) 1283429255|%e %b %Y, %H:%M %Z|agohover Frugal Utilities Rise to Top in Annual Financial Ranking - PR Newswire (press release) 1283461533|%e %b %Y, %H:%M %Z|agohover PowerSecure Stands Ready to Deploy Backup Power for Customers and Utilities as ... - MarketWatch (press release) 1283461318|%e %b %Y, %H:%M %Z|agohover Audit finds PG&E smart meters accurate, faults customer service - CNET 1283459857|%e %b %Y, %H:%M %Z|agohover EGPI Firecreek, Inc. and Terra Telecom, LLC Announce Positive Response and ... - MarketWatch (press release) 1283450494|%e %b %Y, %H:%M %Z|agohover |
