In contrast, the S&P 500 is expected to see earnings decline of 4.5% for Q3, which was downwardly revised since the start of the third quarter, according to FactSet data, as energy and multinational sectors weighed on the broader index. Those data points underscore the predictable though often slow-growth profit outlooks seen in the utilities sector.

“Offsetting these tailwinds, we expect weak electricity demand and regulatory risk to remain a concern for some utilities in the U.S. and globally. Diversified utilities and independent power producers with coal and nuclear generation around the globe are struggling as natural gas becomes a cheaper, more environmentally friendly fuel source for power generation,” adds Morningstar.

Utilities Select Sector SPDR