On September 18, the Federal Reserve cut the benchmark Fed Funds rate by 50 basis points, to a range of 4.75 to 5 percent. The long awaited pivot from “higher for longer” interest rates ignited an investment media frenzy. But since then, the Dow Jones Utility Average is up less than 1.5 percent, barely matching the S&P 500.
That’s hardly surprising. From mid-April when rate cut talk started heating up until the Fed finally acted, the DJUA soared nearly 30 percent. So utility stocks were already pricing in the initial shift.
A number of readers have asked my views on bonds as an alternative to dividend paying stocks. That’s understandable, given what’s been general investor disinterest in dividends over the past year and a half, even when companies have raised them reliably and robustly.
After nearly two decades of flat demand, US utilities are already reporting substantial weather-adjusted increases. That’s from digitization of industries that require massive data collection and processing capabilities.
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.
There was an explosion of takeover activity in the Utility Report Card coverage universe today. Here’s a look at four deals announced today and what they mean for us.
Yesterday, I posted the May issue of Conrad’s Utility Investor, highlighting what’s important from Q1 results and guidance updates for 29 Portfolio recommendations. Since then, seven more of top picks have released results.
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.
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