The public utility field is a broad and complex industry that encompasses everything from water and power distribution to trash collection and sewage treatment. It’s an essential part of our economy, and the companies operating in this space are some influential players in the business world.
Large corporations that provide a range of services and specialized companies that specialize in wind energy and other services are utility instances. Although many companies are controlled by the state within the utility sector thrive, we are exploring which companies operate in the field of public utilities.
This article lists 13 leading companies in the public utility field. These businesses offer a wide range of products and services and are all significant players in their respective markets. If you are curious about learning about these companies, this article is for you.
The Utilities Sector: What Is It?
Before we look at what businesses are involved in the public utility sector, it is essential to be aware of the industry. Large corporations that offer various services, such as electricity and natural gas, or that concentrate on one particular service, such as water, are considered utilities. Some utilities utilize renewable and clean energy sources such as wind and solar.
In contrast to the market for equity, utilities usually offer investors reliable and stable dividends and lower price volatility. In turn, utilities tend to do well in recessions and economic downturns. However, utilities tend to lose popularity during times of economic expansion.
Since utilities need a large amount of costly infrastructure, they carry lots of debt through their financial statements. They mainly depend on fluctuations in interest rates because of their high debt levels; utilities require constant financing to fund construction projects and acquisitions of new assets since they are capital-intensive businesses.
In July 2022, utilities faced more issues due to rising inflation. The rise in inflation during the 1970s and the 1980s forced utilities to take on massive loans, skyrocketing fuel price blackouts, increased regulation, and even bankruptcy. The best investments for safety with a significant income and steady wealth growth will likely continue to be utilities that manage to flourish despite economic hardships.
What Are Utilities Firm’s Pros And Cons?
Utility stocks are a popular long-term buy-and-hold choice because of their long-term stability as investments and regular dividend payments. Compared to other securities such as stocks, dividends from utility stocks tend to be higher.
Utility companies are attractive in times of economic recession and low-interest rates. Due to the dividends they pay out for their stock, they experience lower volatility and provide an engaging way to get steady returns on investments. However, utilities have to invest in expensive infrastructure that requires frequent maintenance and updating and is under the strict management of the regulatory authorities. The utility industry often offered debt-related packages that increased their debt load to meet infrastructure demands.
They are also more susceptible to the risk of interest rates because of the nature of the debt. The Company must provide higher yields to attract bond investors if rates increase.
Pros:
- The utility industry offers safe long-term investments that provide regular, appealing payouts.
- In times of economic turmoil, utilities can be an insurance policy for investments.
- ETFs, bonds, and stocks specific to specific companies are only some of the investment options utilities offer.
Cons:
- A strict regulatory oversight makes raising rates for utilities to increase income difficult.
- A costly utility infrastructure requires continuous maintenance and updating.
- Utilities lose their appeal and, at the same time forced to increase their bond yields when interest rates are very high.
Now, let’s look at the companies involved in public utilities.
What Are Leading Companies In The Public Utilities Field?
Let’s look at which companies are part of the field of public utilities.
When selecting a utility service provider, it is crucial to consider the size of the business and its client base, the financial health of the Company, and the track record and history of customer satisfaction.
Consider the following factors when selecting a public utility service. These are some of the essential multi-utilities:
American Electric Power
A.E.P. is a diversified energy company with operations in 11 states and a generation portfolio of almost 38,000 megawatts. American Electric Power Company, Inc. (A.E.P.) is a publicly traded utility holding company headquartered in Columbus, Ohio. The Company operates through its subsidiaries. A.E.P.’s service territory covers more than 67 million people in parts of 11 states in the United States.
American Electric Power is the largest electric service provider in America and U.S.S., A.E.P. has been operating for over one hundred twenty years.
Edison International
Edison International is a holding company that generates and distributes water and gas and invests in energy services and technologies. Its subsidiaries include Edison Energy Group, Inc., a commercial and industrial energy solutions provider, and Southern California Edison Company (S.C.E.), one of the nation’s largest electric utilities.
Based in Rosemead, California, Edison International is the parent company of Southern California Edison, one of the nation’s largest investor-owned electric utilities. Edison International is a diversified energy company with operations in 27 states and a generation portfolio of almost 40,000 megawatts. They also offer products and services to help improve sustainability and energy conservation as well as renewable power in the United States, Chile, and the Philippines are only a handful of countries where Edison International conducts business.
Southern Company
The Southern Company is an American electric utility holding company headquartered in Atlanta, Georgia, U.S.A. It is integrated into the U.S. electricity market and operates in four states: Alabama, Florida, Georgia, and Mississippi.
The Southern Company (NYSE: SO) is a leading energy company with more than forty-four thousand (44,000) megawatts of generating capacity and one thousand five hundred (1,500) billion cubic feet of combined natural gas consumption and throughput volume serving nine million customers through its subsidiaries. The Company provides electricity services to more than four million customers in the United States through its subsidiaries and operates in four states: Alabama, Florida, Georgia, and Mississippi.
Duke Energy
Duke Energy is one of the biggest electric power holding companies in the United States. Headquartered in Charlotte, North Carolina, Duke Energy has approximately 52,700 employees and a diversified portfolio of electric generation and delivery businesses, providing services to about 7.3 million customers in the United States.
Aqua America, Inc.
Aqua America, Inc. (NYSE: W.T.R.) is a publicly traded water and wastewater utility holding company headquartered in Bryn Mawr, Pennsylvania. Aqua America is the largest U.S.-based, publicly-traded water utility and serves nearly three million people in Pennsylvania, Ohio, North Carolina, Illinois, Texas, New Jersey, Indiana, and Virginia.
AT&T
AT&T Inc. is an American multinational empire holding company headquartered at Whitacre Tower in Downtown Dallas, Texas; it is the world’s largest provider of pay T.V.V, with AT&T services reaching over 34 million subscribers in the United States as of 2017. AT&T is also the second-largest provider of mobile telephone services and the largest provider of fixed telephone services in the United States.
The A.E.S. Corporation
The A.E.S. Corporation (NYSE: A.E.S.) is a Fortune 200 American power company that generates and distributes electric power to 17 countries. A.E.S. is headquartered in Arlington, Virginia, and employs over 11,000 people worldwide. In 1968, the Company was founded and currently operates in North America, South America, Europe, Asia, and Africa.
Verizon
Verizon Communications Incorporation is an American multinational telecommunications cartel and a Dow Jones Industrial Average corporate component. The Verizon Company is based at 1095 Avenue of the Americas in Midtown Manhattan, New York City, but has a significant presence throughout the New York metropolitan area. As of 2017, Verizon is the largest telecommunications provider in the United States, with 150 million mobile customers and 108 million fixed-line customers.
American Water Works Company, Inc.
American Water Works Company, Incorporation is the largest publicly traded U.S. water and wastewater utility company. Headquartered in Camden, New Jersey, American Water serves more than 15 million people in 47 states and Ontario, Canada.
National Grid Pic
National Grid Pic is a British multinational electricity and gas utility company based in Warwick, United Kingdom; its main activities are in the United Kingdom and the Northeastern United States. National Grid has a primary listing on the London Stock Exchange and is a constituent of the FTSE 100 Index.
Xcel Energy Inc.
Xcel Energy Inc. is an American public utility holding company based in Minneapolis, Minnesota, serving more than 3.3 million electricity and 1.8 million natural gas customers in eight states. It is traded publicly via the New York Stock Exchange under the code “X.E.L.”
Pinnacle West Capital Corporation
Pinnacle West Capital Corporation is an American electric utility company headquartered in Phoenix, Arizona, U.S.A. Through its principal subsidiary, Arizona Public Service Company (A.P.S.), the Company serves more than one million and two hundred thousand (1.2 million) customers in 11 of the state’s 15 counties.
Comcast Corporation
Comcast Corporation is an American international mass media conglomerate and one of the world’s largest entertainment companies. Headquartered in Philadelphia, Comcast provides cable television, Internet, and phone services to residential and commercial customers in the United States.
Wrapping Up: What Leading Companies Are In The Public Utilities Field?
The public utility field is a massive and rapidly-growing industry, with companies of all sizes providing essential GTM services to consumers worldwide. In this article, we’ve highlighted thirteen leading companies in the public utility field. Hoping you found this information helpful and informative.
Companies that provide necessities like water, power, electricity, and natural gas comprise the utility sector, one of the industrial stocks categories. Stocks deemed utility purchased by investors for long-term investment. Both the dividend and price-earnings of these stocks are usually stable.
Confident financial analysts believe that the utility industry will see rapid growth in the next decade because of the shift toward “clean” energy sources, the introduction of laws that promote competition, and an administration committed to renewable energy sources.
