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Power Players: A Closer Look at Utilities' Moats

New research lends greater insights into how utilities gain and hold their competitive advantages.

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Utilities, usually a sleepy part of the stock market, have been on a tear lately. Morningstar's utilities sector index is up over 18% year to date, while the S&P 500 has increased less than 1% during that same time period.

Investors scooped up utility stocks when it became clear that interest rates would remain low--or even fall--making these firms' hefty dividend yields all the more attractive. It also helped that the prices of inputs such as natural gas decreased, helping boost demand. Add in technological advances and an explosion of interest in renewables such as solar and wind and it's easy to see why utilities have been on such a good run.

Rob Wherry does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.