11 Most Important Stock Market Sectors

11 Most Important Stock Market Sectors

According to the Global Industry Classification Standard (GICS) system, there are 11 stock market sectors. We categorize stocks into industries because it will be easier to analyze stocks that have very similar business models. Moreover, you can choose to invest in sectors that you understand more and are interested in.  

The 11 stock market sectors based on size is as follows: 

1. Information Technology

2. Health Care

3. Financials

4. Consumer Discretionary

5. Communication Services

6. Industrials

7. Consumer Staples

8. Energy

9. Utilities

10. Real Estate

11. Materials.

1. Energy Sector 

The energy sector is a provider of oil, natural gas, and other consumable fuels. The companies in this sector explore, drill, and extract energy products. Additionally, the energy sector includes the companies that provide materials, equipment, and services to oil and gas companies.

Examples for energy stocks: Daqo New Energy Corp, Sunrun Inc, Exxon Mobil, Chevron, and Enphase Energy Inc.

2. Materials Sector

The materials sector companies provide different raw materials for other industries to operate. Companies like gold, copper producers, or forestry companies such as wood are included in this list. 

Examples for materials stocks: United States Steel Corp, DuPont, and Cleveland-Cliffs Inc 

3. Industrials Sector

The Industrials sector includes 14 different industries ranging from railroad companies to military weapons producers. Aerospace & Defense and Construction & Engineering are the largest industries that are included in this sector. Companies that make electrical equipment, building products also fall into this sector. 

Examples for materials stocks: Seaboard Corp, Boeing, Union Pacific 

4. Utilities Sector

The utility sector provides electricity, water, and gas to buildings and households. Moreover, some utility companies deliver more than one of these products. Some utility companies are engaging in developing more renewable energy sources.

Examples for utility stocks: Duke Energy, American Electric Power, and Exelon Corp. 

5. Healthcare Sector

The healthcare sector has two primary components; one produces pharmaceuticals and treatments, and the other provides healthcare equipment and services like surgical supplies and health insurance.

Examples for healthcare stocks: Johnson & Johnson, UnitedHealth Group, and Abbott.

6. Financials Sector

The financial sector includes businesses that are involved in finance, investing and money. We can find banks, insurance companies, REITs, and brokerage houses among financials.  

Examples for financials stocks: Berkshire Hathaway, JPMorgan Chase, Visa, and Mastercard. 

 7. Consumer Discretionary Sector

The consumer discretionary sector offers luxury items or services that are not basic for human survival. This sector companies sell high-priced, leisure, and luxury products. In general, depending on an individual’s wealth, demand for these items can be different. Items like luxury cars, jewellery, experiences like trips, dining in elite restaurants all belong to this sector.  

Examples for consumer discretionary stocks: Starbucks, Best Buy, and Amazon. 

8. Consumer Staples Sector

Consumer staples companies provide items necessary for daily uses, and people need those items no matter their financial situation. Companies that offer food, beverage, household products, and personal products are included in this sector. Consumer staple companies are very well known among ordinary people because individuals often see their products everywhere. 

Examples for Consumer Staples stocks: Coca-Cola, Procter &Gamble, and Coty Inc

9. Information Technology Sector

Information technology includes companies that develop technological items or services. Technological innovations like computers, microprocessors, and internet services all belong to this sector. Nowadays, many companies create software and hardware and focus on information technology. We can see a significant increase in the number of technology-based companies. 

Examples for Information Technology stocks: Microsoft Corporation, Oracle Corp., and Apple. 

10. Communication Services Sector

The communication services sector includes companies that help people to keep connected. This provides telecommunication services and media, and entertainment services. 

Examples for Communication Services Sector: Netflix Inc. and Walt Disney Co., and Facebook. 

11. Real Estate Sector

As the name suggests, this sector includes investments related to real estate. Real Estate Investment Trusts (REITs), realtors, and other companies are all included in this sector. 

Examples for Real Estate Sector: CubeSmart, Boston Properties, and Equinix.

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