Utilities, such as electricity, water, and natural gas companies, are essential services that people rely on regardless of economic conditions. This leads to stable demand for their products, ensuring steady revenue generation.
Since utilities typically operate under regulatory frameworks that allow them to pass costs onto consumers, their cash flows are often both predictable and resilient, even during periods of economic downturn.
This reliability is a big selling point for income investors seeking consistency, particularly when compared to the volatility seen in other sectors.
This post originally appeared at Investing Daily.