This chapter outlines some of the most important macro‐drivers for the Utilities sector. Drivers are factors that either impact, positively or negatively‐the performance of stocks, industries, sectors, and the entire market. There are three broad categories of drivers that can be used to examine the forward‐looking prospects for any stock market sector, and they are economic drivers, political drivers, and sentiment drivers. Unlike rest of the stock market, utilities consistently perform best when the economic outlook is weakening. This is not because a weak economy is actually beneficial for Utilities fundamentals, but it is just less detrimental relative to most other sectors. There are many ways government policy affects the Utilities sector. Some of the most important political drivers include energy and environmental policy, utilities regulation and taxes. Because the sector tends to return a large portion of its earnings to shareholders through dividends, changes in the dividend tax rate are particularly important to Utilities, as they may have a large impact on the sector's after‐tax cost of capital.
Utilities Sector Drivers
Fisher Investments on Utilities ; 101-132
2012-01-02
32 pages
Aufsatz/Kapitel (Buch)
Elektronische Ressource
Englisch
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