So far in 2024, the Dow Jones Utility Average lags the S&P 500 by nearly 10 percentage points. But over the past month, buying interest has picked up for at least a handful of CUI portfolio companies. Leading the way are nuclear powered Constellation Energy (NYSE: CEG) and Vistra Energy (NYSE: VST), with year-to-date gains of 46 and 57 percent respectively. But even underperforming Avangrid Inc (NYSE: AGR) now has a double-digit 2024 return, as parent Iberdrola SA (Spain: IBE, OTC: IBDRY) has made a non-binding all-cash takeover offer that’s likely to go higher. I continue to believe utilities as a sector won’t really capture upside momentum until there’s a genuine Federal Reserve pivot to lower interest rates. And with the central bank reactive as ever to the latest data point, investors have no choice but to be patient.
Nine more CUI Portfolio recommendations have announced Q2 results and updated guidance since the August issue went to post. I’ll have a full recap and analysis for each in the September issue. But here’s what you need to know now.
How low can deep value stocks go? If you own AT&T Inc (NYSE: T) and/or Verizon Communications (NYSE: VZ), you’re no doubt asking that question.
I’ve heard this “simple rule” repeated thousands of times by investors, media personalities and even fellow analysts since I came into the advisory business in the mid-1980s. And I’m certain it will be regurgitated thousands more times long after I leave it, hopefully some decades from now.
A banking crisis can be a tough time to strengthen a balance sheet. But based on calendar Q4 results and updated guidance announced this week, financial recovery plans at Aggressive Holdings Algonquin Power & Utilities (TSX: AQN, NYSE: AQN) and Enel SpA (Italy: ENEL, OTC: ENLAY, ESOCF) are accelerating.
Since the February issue of CUI posted, 15 more Portfolio recommendations have released calendar Q4 earnings and updated guidance. And none so far have been as potentially consequential as Dominion Energy’s (NYSE: D).
In the January CUI, I highlighted the dramatic drop in utility borrowing costs starting mid-October as a major catalyst for sector growth in 2024. Since then, we’ve seen investor concerns intensify that the Federal Reserve will delay reducing the benchmark Fed Funds rate until at least late summer.
Sellers were convinced higher for longer interest rates would undermine utility sector capital spending, and with it earnings and dividend growth, and priced stocks accordingly for a fall.But, so far at least, the fears of a sector-wide earnings Armageddon have proven to be wholly unfounded.
Utility investors received some very good news yesterday when US wind and solar leader NextEra Energy (NYSE: NEE) released surprise-free Q3 results and updated guidance.
A little over a week ago, NextEra Energy (NYSE: NEE) announced it would postpone a planned “drop down” or sale of assets to its affiliate NextEra Energy Partners (NYSE: NEP). Not surprisingly, I’ve answered quite a few emails over the past week ranging from whether both are headed to oblivion to whether it’s time to “double down” on the family.
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