Utilities Offer Services Despite Dues Amid Coronavirus Woes

The fear of novel coronavirus is gripping the whole world and adversely impacting the global economy. COVID-19 continues to spread, with the total count of infected people on a global basis currently being 423,469, out of which 18,909 have lost their lives. On an encouraging note, 109,153 infected people have fully recovered. Governments on a worldwide basis are working hard to break the chain and stop the spread of this contagious virus. They are also making efforts to treat more infected people.

COVID-19 has already been declared as pandemic by the World Health Organization (WHO). Per WHO’s directive, the best possible way to stop the spread of this contagious COVID-19 is social distancing, staying back at home, avoid touching mouth, ears and eyes, and most importantly, washing hands properly with soap at regular intervals.

With governments across the globe announcing a complete lockdown on day-to-day activities, it is adversely hurting the U.S. economy. Recently, the Senate leaders and the Trump administration agreed on a $2-trillion stimulus package to rescue the U.S. economy.

Utilities Coming Into Play

Lockdown and restrictions are creating financial hardships for the common people. Some of the electric and water utility consumers might face financial hardships to source funds for repaying dues.

Amid such financial stress on consumers, utilities like American Water Works (NYSE:AWK) , California Water Service Group (NYSE:CWT) Duke Energy (NYSE:DUK) Corporation (NYSE:D) , Dominion Energy (NYSE:D) and American Electric Power (NYSE:AEP) , among others, have already decided to continue providing water, wastewater and electric services to consumers despite non-payment of service dues.

Notably, clean water supply on a 24X7 basis will help people ward-off the virus if they wash their hands properly.

Duke Energy currently carries a Zacks Rank #2 (Buy), while Dominion Energy and American Electric Power have a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

A recent release from the John Hopkins University urged people to remain at home and continue following social distancing guidelines as that will slow the spread of COVID-19. As more people are forced to stay back at home, it will result in an increase in residential demand for utility services. Since all of us need to make concerted efforts to fight the spread of coronavirus, initiatives taken by the utilities by not suspending essential services will allow consumers to make small contributions toward breaking the COVID-19 chain.

Price Performance

Year to date, shares of all the water and electric companies mentioned above in this report have outperformed the Zacks Utility Sector.

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