In: Business and Management

Submitted By edisu
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The utilities sector is an industry that resembles the type of investment that our client is looking for. Utilities have long been considered a value investment that provides continuous and large dividends with little risk. It is a defensive industry that will continue to have consumers in all types of markets and even during volatile economic conditions, such as the state we currently reside in. The major issue that impacts utility companies is regulation by the government. There is a lot of concern about the environment and ensuring that pollutants are kept to a minimum and an effort to prevent monopolies. Looking toward the future, we expect to see an increase in the expenses for utility companies as more regulations are added, but also expect to see growth in the industry as power reaches more areas of the globe. “The Energy Information Administration projects that 355 gigawatts of new electric generating capacity - or more than 40% more than the industry currently supplies - will be needed by 2020 to meet growing demand.”
Two companies that fit our expectations in the utility industry are The Southern Company (NYSE:SO) and Exelon Corporation (EXC). Exelon is a utility holding company that has more well-known subsidiaries such as ComEd and PECO Energy Company. Through its subsidiaries, Exelon does business in the generation of electricity as well as selling electricity to consumers. Southern Company is also a holding company that owns public utility companies in Florida, Alabama, Georgia, and Mississippi. Exelon has a larger market to work with then Southern company as it services all across the United States.
One of the key issues identified in this industry were growing regulations and environmental issues. After researching Exelon, it was noted that there were two main events that reflected negatively on the company. In Pennsylvania, Exelon…...

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