stock market vocabulary guide

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Stock Market Vocabulary

Stock Market Vocabulary- Investing in Utilities

Recent  history that investing in utility stocks was like opening up a pass book savings account. Today, the investor needs to be more cognizant of the companies compliance with various regulations and their current stance on applying new and efficient technology to understand more of the market vocabulary.  The increase in demand and a need for power plants and distribution has placed a burden on the utilities sector.

Some utility companies employ a combination of energy producing resources. Some rely on coal, hydro electrical plants and the occasional nuclear plant. Many rely on their natural gas reserves and  electricity contracts with their producers to provide power to their customers.  In effect the utility is a reseller of power sources.

Investing in Public Utility Companies:

Some good work horse utility companies are on the market.  In seeking out the security of a public utility you may be interested in dividends. For some investors the utility is a relatively secure method of investing for the long term and part of a retirement plan.

One example of a good utility is American Electric Power Company.  It trades on the NYSE under the ticker AEP.  This is a public utility holding company that transmits, generates and distributes power to a variety of utility companies. Some of these utility companies are cooperatives, municipal power companies and smaller utility companies. 

AEP  has been a consistent performer for over 30 years and its major institutional investors

read like a who's who on Wall Street.

There are other holding companies that may be of interest to the investor with a desire to invest in utilities. Duke Power that trades under the ticker DUK is a multi billion dollar company.  Another l00 year old company is Constellation Energy Group in Baltimore, Maryland. The significant aspect of investing in power companies is whether the company is in compliance with various regulations pertaining to clean air and water. The cost to update facilities is costly. Most of the major players in power have already commenced updating their facilities.

Investing in Diversified  Utility Companies:

There are some very good diversified  utility companies that are consistent performers.  Wisconsin Power & Electric trades on the NYSE as WEP.  This company is a consistent performer and recently provide a large credit to its customers. It has a 5.9 billion market capitalization.  The company is owned by some of the biggest funds in the country.  It sells for

Two other good  good diversified utility companies are Integrys Energy Group and Alliant Energy which are both utilities with multi-billion dollar investments.  Both have a blue ribbon groups of institutional investors.

All of the utility companies listed require some analysis to determine  if the company fits your investment portfolio.  The utility sector has some pressure due to world wide considerations and the demand of end users. The key is if the company is poised for future growth by enhancing its infrastructure and distribution methods.  

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