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3 Utilities Moving Into Wide-Moat Territory

ITC Holdings, American Electric Power, and Public Service Enterprise Group are aggressively expanding into a wide-moat area of electric transmission.

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Charles Fishman: At Morningstar, we award most regulated utilities a narrow moat because of their monopoly position in the territories they cover. However, that's offset against the fact that regulators typically cap their returns.

However, one area that we do award a wide moat to is electric transmission. And there are three companies that are aggressively expanding into this area, and that includes ITC Holdings (ITC), American Electric Power (AEP), and Public Service Enterprise Group (PEG).

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