Sector Beta Reference
Levered and unlevered beta by industry, for when you don't have a company-specific beta.
Source: Damodaran Online (NYU Stern) — industry betas, US companies · January 2026 · last verified 2026-09-12
How sector beta reference data is used
Not every company has a reliable, liquid market-observed beta — private companies, recent IPOs, and thinly traded stocks all lack the trading history needed to estimate one directly. Sector beta solves this by averaging betas across a sample of comparable public companies within the same industry, giving a reasonable starting estimate when a company-specific figure isn't available.
The standard workflow is to take the sector's unlevered beta (business risk with each sample company's own leverage stripped out), then re-lever it to your specific company's capital structure using the Levered Beta calculator — this produces a more accurate company-specific estimate than using either the raw sector average or an unrelated company's beta directly. Once you have that company-specific beta, it becomes the input to the CAPM calculator for estimating expected return.
Frequently asked questions
- What is an "unlevered" beta?
- Beta with the effect of each sample company's own debt load removed — a cleaner read on pure business risk, comparable across companies with different capital structures.
- How do I use this for CAPM?
- Take the unlevered beta here, re-lever it to your own company's debt-to-equity ratio with the Levered Beta calculator, then use that as the beta input to CAPM.
- What is sector beta?
- Sector beta is an average beta computed across a sample of public companies within an industry, used as a reference point when you don't have a reliable company-specific beta — for a private company, a recent IPO, or a thinly traded stock, for example.
- Why does beta vary between industries?
- Beta reflects how sensitive an industry's earnings and stock returns are to broader economic cycles. Cyclical industries (like construction or luxury goods) tend to have higher beta since demand swings with the economy, while defensive industries (like utilities or consumer staples) tend to have lower beta since demand stays relatively stable regardless of economic conditions.
- What sectors tend to have high vs low beta?
- Technology, discretionary consumer goods, and cyclical industrials tend to sit at the higher end of the beta range, reflecting demand that swings with economic conditions and investor sentiment. Utilities, consumer staples, and healthcare tend to sit at the lower end, reflecting steady, less cyclical demand.
- How should I use sector beta if I cannot find a company's specific beta?
- Take the sector's unlevered beta (stripped of any particular company's leverage effect), then re-lever it to your specific company's own debt-to-equity ratio using the Levered Beta calculator — this produces a more relevant company-specific estimate than using the sector's levered beta directly, since that reflects the sample companies' average leverage, not yours.
- What is the difference between levered and unlevered sector beta?
- Levered sector beta reflects the average observed market beta across the sample companies, including the effect of their individual debt levels. Unlevered sector beta strips that leverage effect out, isolating the underlying business risk of the industry — this is the version you typically want to start from before re-levering to your own company's capital structure.