Editor’s Note: Volatility in the markets has been relentless. Traders are scouring the investment landscape for something…anything…that doesn’t come apart like the body panels on a Cybertruck.

Enter the gloriously dull utility sector. In times like these, boring is beautiful. Below, I explain why utilities offer a “trifecta” of growth, income and safety. I also steer you in the direction of a superb group of utility stocks that can withstand the craziness of any era.

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When the political brand is chaos…

The second Trump regime vowed to shake things up and boy, it has delivered…with a vengeance. It has shattered the Western alliance, implemented a herky-jerky tariff policy, and decimated government budgets and institutions.

Inflation fears have resurfaced, consumer confidence is rapidly eroding, business investment is at a standstill, interest rates are climbing, and the stock and bond markets are on a downward trajectory.

Global fund managers aren’t exactly “woke” liberals. And they’re upset with the current state of affairs.

A report in the Independent, published April 17, details a new survey that found attitudes among global fund managers have sunk to a 30-year low.

“Investor feeling was only worse in the aftermath of the 9/11 terror attack, the global financial crisis, Trump’s first-term trade war with China, and the 2022 inflation crisis,” the British online newspaper Independent reported last Thursday, citing survey data.

The Bank of America Fund Manager Survey, which gauged sentiment among 164 global fund managers managing a cumulative $386 billion in assets, was conducted two days after Trump unveiled his sweeping set of tariffs on “Liberation Day” earlier this month.

The escalating U.S.-China trade war is fueling these worries. Notably, in response to Trump’s steep tariffs on Chinese goods, China has imposed strict new export controls on seven rare earth elements. That’s a huge problem for America.

These elements—samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium—are vital for products ranging from electric cars and semiconductors to military equipment like missiles and drones.

And to top it all off, Federal Reserve Chief Jerome Powell and President Trump are in a full-blown feud. Trump has been attacking Powell due to the latter’s newly cautious stance on monetary policy.

Despite the U.S central bank’s traditional independence, Trump said on April 17 that Powell’s “termination cannot come fast enough.”

Jerome Powell, by the way, is a conservative Republican who was initially nominated by Trump.

With all this chaos, it’s no surprise the market has buckled under the pressure. But you don’t have to run for the hills. You can stay invested…via utilities stocks.

Utilities hold their own…

After five uninterrupted quarters of growth, the S&P 500 finally tripped over its shoelaces and fell flat on its face, dropping 4.6% in the first quarter of 2025. That’s the first red quarter since Q3 of 2023.

Investors, once giddy on artificial intelligence hype and speculative tech hopes, suddenly remembered the cold, hard laws of economic gravity. In that moment of reckoning, they stampeded out of growth stocks like a crowd fleeing a flaming circus tent.

Tech was torched in Q1 2025, shedding 11%, while consumer discretionary stocks nosedived 11.7%. Lofty valuations turned into lead balloons as rate hikes continued to drain the oxygen out of speculative bets.

However, while the shiny stuff lost their luster, the old reliables emerged in positive territory. Energy thrived and came in first at 9.9%, thanks to rising oil and gas prices. Health care posted a respectable 6.5%. Consumer staples held their ground. And utilities? They methodically cranked out a 4.9% return while sexier “story stocks” went to hell in a handbasket.

So why utilities? Whether the economy is booming or imploding, people still need to keep the lights on, the water running, and the toilets flushing. Utilities churn out dependable revenue because their services are non-negotiable. And unlike those tech startups that vanish when capital dries up, utilities are usually backed by regulators who frown on failure.

Utilities lately have racked up robust earnings growth. According to the latest data from research firm FactSet (released April 17), the blended year-over-year earnings growth rate for the first quarter of 2025 for the S&P 500 is 7.2%. “Blended” combines actual with expected results.

The utilities sector is expected to report the third-highest year-over-year earnings growth rate of all 11 S&P 500 sectors at 10.7%. At the industry level, all five industries in the utilities sector are projected to report year-over-year earnings growth: Independent Power and Renewable Energy Producers (130%), Water Utilities (13%), Multi-Utilities (10%), Electric Utilities (7%), and Gas Utilities (7%).

According to the Business Research Company, the utilities market size has grown strongly in recent years. It will grow from $6836.95 billion in 2024 to $7305.9 billion in 2025 at a compound annual growth rate (CAGR) of 6.9%. The market is expected to grow to $9213.76 billion in 2029 (see chart).

This growth is being driven by rapid economic expansion around the world, technological advances, and the rise of energy-hungry middle classes in emerging markets, particularly in the Asia-Pacific region.

There’s also the matter of dividends. Sweet, reliable dividends. Right now, the average utility yield is around 3%, while the S&P 500’s yield is closer to 1.2%.

In a world where even cash feels like it’s melting in your pocket thanks to inflation, those quarterly checks look mighty appealing. Utilities typically offer stable, above-average yields, making them a natural refuge for jittery investors when bond markets look less like a haven.

Read This Story: The “Trump Slump” Playbook: How to Invest Now

Of course, none of this is happening in a vacuum. Whether you’re a free-market purist or a dyed-in-the-wool Keynesian, the one thing almost every analyst can agree on is that the current political environment is a mess. The stock market doesn’t fear partisanship—it fears chaos. And right now, chaos is in full bloom.

This is precisely why the utility sector is enjoying a moment in the sun. In a context where policy announcements are about as reliable as a Magic 8 Ball, the humble utility is a beacon of old-fashioned predictability.

Shelter from the storm…

Utilities, such as electricity, water, and natural gas companies, are essential services that people rely on regardless of economic conditions. This leads to stable demand for their products, ensuring steady revenue generation.

Since utilities typically operate under regulatory frameworks that allow them to pass costs onto consumers, their cash flows are often both predictable and resilient, even during periods of economic downturn.

This reliability is a big selling point for income investors seeking consistency, particularly when compared to the volatility seen in other sectors.

Many utility companies have a long history of paying dividends, often with attractive yields. These companies distribute a large portion of their earnings to shareholders in the form of dividends, making them appealing to investors seeking steady income.

Many utilities are able to increase their dividends over time due to their consistent revenue streams, providing investors with not just income, but income growth.

In contrast, bonds are more sensitive to interest rate changes and can experience price declines when rates rise.

Utility companies can often adjust their prices in response to inflation through regulatory mechanisms. This ability to pass on higher costs helps them maintain margins and cash flows, making utilities a potential hedge against inflation, which is a key concern for many fixed-income investors.

While utilities are typically seen as stable and reliable, many also have growth potential. With investments in renewable energy, infrastructure modernization, and energy efficiency, innovative “green” utility companies are positioning themselves for long-term growth. These initiatives allow for future revenue generation, even as they provide investors with income today.

Meanwhile, bond investors are facing daunting prospects. With interest rates expected to rise or stay elevated, the bond market is becoming less appealing to risk-averse income investors.

As rates rise, the price of existing bonds falls, leaving bondholders vulnerable to capital losses. In contrast, utility stocks often offer higher yields, inflation protection, and growth opportunities that bonds simply can’t match at the moment.

With the market throwing tantrums, utilities are the grown-ups in the room…and they’re quietly paying investors.

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PS: As I’ve just explained, utility stocks make a lot of sense right now, but you need to pick the right ones. Here’s the good news: we’ve pinpointed several best-of-breed utility stocks that are well-suited for these crazy times. In fact, since early 2000, they’ve beaten the S&P 500 year in and year out. For details, click here.