The utility sector is a haven for investors seeking relative stability and income. Utilities have a very recession-resistant business model. Since regulated utilities are allowed to increase their rates each year, utility stocks can pay generous dividends to shareholders and raise them each year. Utilities probably aren’t going to lead the next market rally, but they do offer relative safety when the market declines. Utilities have lower volatility and higher dividend yields than the overall stock market. This provides their investors with margins of safety against big declines.
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