In our view, investing in utilities offers a compelling opportunity to long-term investors. Utilities are regulated monopolies that sell some of modern life’s most basic necessities—electricity and water. Utilities’ monopoly status gives them the opportunity to earn guaranteed returns that are set by local regulators. As a result, utilities are one of the most stable and enduring businesses in America. And they offer some of the market’s highest dividend yields to boot.
Interesting Facts For Utilities Investing
In 2011 there were 144.5 million electrical customers in the United States. — EIA
Air conditioning represented 19% of America’s electricity consumption in 2011, the most of any category, followed by lighting which represented another 13%. — EIA
There are 3,269 electricity providers, including publicly owned, investor owned, cooperatives, federal power agencies, and power marketers in the United States. — APPA
“According to the EPA, the U.S. has 52,873 community water systems supplying most people’s drinking water.” — Standard and Poor’s
In 2011 prices for water in the U.S. increased by 8.1% on average compared to a CPI increase of 3.6%. —Standard and Poor’s
One of the largest uses of water in the U.S. is generating electricity. “Every day in 2008, water-cooled power plants in the U.S. withdrew, on average, 60 billion to 170 billion gallons of water from lakes, rivers, and streams and consumed 2.8 billion to 5.9 billion gallons of that water.” — Standard and Poor’s
The water utility sector is highly fragmented, with the few large national players serving over 1 million households apiece. — WeiserMazars 2012U.S.Water Industry Outlook
“The earth has about 35 million cubic kilometres (km3) of fresh water—about 2.5% of the total, according to UN-Water. But 70% of this is locked up as ice or snow in the Antarctic and Arctic regions, or as permanent snow cover in mountainous regions. This leaves less than 1% for watering farms, supplying industry and piping into taps.” — The Economist Intelligence Unit
“Americans use much more water each day [90 gallons] than individuals in both developed and undeveloped countries: For example, the average European uses 53 gallons; the average Sub-Saharan citizen, 3-5 gallons.” — EPA
