Investopedia: 2011 In Review - Utilities

Utilities have a long-held reputation as being safe havens during difficult economic times. After all, while demand for utilities does show some correlation with economic activity, the bottom doesn't usually fall out when times are tough. While it is not fair to say that utility investing was a risk-free way of earning market-beating returns in 2011, it was not hard to find winners in this broad sector.


Deals Drive Results
One thing that quickly jumps out from the list of top performers in the past year is the heavy impact of mergers in the sector. Utilities continue to consolidate as the regulatory and financing burden of new capacity construction works against smaller players, and the benefits of operating efficiency become more significant.

Central Vermont (NYSE:CV), Constellation Energy (NYSE:CEG) and Progress Energy (NYSE:PGN) all posted solid above-market returns this year on the back of buyout bids (from Gaz Metro, Exelon (NYSE:EXC) and Duke Energy (NYSE:DUK), respectively). (To know more about acquisitions, read Analyzing An Acquisition Announcement.)


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http://stocks.investopedia.com/stock-analysis/2011/2011-In-Review--Utilities--OKE-ED-CNP-AWK1214.aspx