September is often the cruelest month for the stock market, including utilities. This year, however, nothing has broken the sector’s upward momentum, including devastating hurricanes, uncertainty surrounding tax reform, and a pending trade case that could slow the adoption of solar power in the US.
We’re not complaining; our Portfolio holdings continue to benefit from this momentum.
But the higher bar of expectations that comes with these lofty valuations increases the potential for disappointment.
This month’s update to the Utility Report Card uses our proprietary Conrad’s Utility Investor Value Index to compare current valuations to previous peaks in the run-up to the 2000-01 and 2008-09 meltdowns.
The biggest takeaway from this exercise is that many utility stocks trade at valuations that exceed these highs. Some of this disconnect between fundamentals and valuations likely stems from the growing popularity of passive investment strategies, a phenomenon we explore at length in the feature article.
Nevertheless, we continue to find value in our coverage universe.
What is the internet of things, and why is this growth theme important to the telecom sector? Find out here.
Kinder Morgan's management team unveiled a plan for the midstream giant to grow its dividend by 60 percent next year. Despite this big talk, the stock remains a show-me story.
We take a look at the handful of Portfolio holdings that reported first-quarter results after the May issue hit the web.
We revisit our basket of fixed-income securities and take profits on one bond that has rallied hard since the presidential election. We also explore the fallout from Westinghouse's bankruptcy.
Massive distribution cuts from the likes of Plains All-American Pipeline LP have severely damaged midstream master limited partnerships' (MLP) reputation among income investors. But our favorite MLPs trade at favorable valuations and offer exposure to compelling volumetric growth stories.
Sempra Energy's takeover offer for Energy Future Holdings--the fourth bid that brought before the Public Utility Commission of Texas--has a good chance of securing approval, though some adjustments may be necessary.
AT&T and Verizon Communications' second-quarter subscriber additions surprised to the upside, catalyzing a sharp rally in these telecom titans' stock prices. We explain the value of taking a longer view on these names.
Mergers and acquisitions continue apace in the utility sector, but regulators have grown more assertive about ensuring that these deals happen on their terms.
Does Eversource Energy's recently announced acquisition of Aquarion Water mark the start of a new trend in utility mergers and acquisitions?
Roger's favorite utilities for investors seeking superior price appreciation by taking calculated risks.
Harness the tried and true wealth-building power of rising dividends.
Nothing compounds wealth like reinvesting a rising stream of dividends.
Warning: Falling Dividends.
Roger's current take and vital statistics on more than 200 essential-services stocks.