• Capitalist Times
  • Energy and Income Advisor
  • Twitter

Executive Summary

A Fistful of Buys, A Truckload of Sells

By Roger S. Conrad on Oct. 8, 2017

A record 67 of the 202 companies covered in our Utility Report Card rate a Sell. In some instances, these ratings reflect historically elevated valuations that give investors an opportunity to take profits before the inevitable reversion to the mean. Other Sell calls seek to help investors avoid genuinely weak companies at risk of a major blow-up. Fourteen of these stragglers appear on our Endangered Dividends List.

Although many popular, large-capitalization utility stocks trade within a few percentage points of new all-time highs, the list of potential downside catalysts continues to grow.

Utilities operating in Florida and on the Gulf Coast, for example, must deal with the aftermath of two of the most destructive hurricanes on record, increasing the risk that their response could fall short of customers and regulators’ expectations. (See Utilities and Hurricanes: Responding to Harvey and Irma.)

Concerns about rising interest rates could also provide an excuse to take profits, while the Trump administration has sought to intervene in highly competitive wholesale-electricity markets.

Since the September issue of Conrad’s Utility Investor hit the web, Utilities Select Sector SPDR (NYSE: XLU) has lagged the S&P 500 by 6.5 percentage points—a degree of underperformance that could portend further weakness for the sector.

On the other hand, the market can remain irrational much longer than investors expect. Moreover, all signs point to a strong earnings season for many of the companies in our Utility Report Card.

And buying opportunities still exist at this stage in the cycle. Company-specific developments have prompted us to raise our buy targets on several Portfolio holdings, including this month’s aggressive spotlight. The feature article also identifies which names would benefit from the Trump administration’s proposed intervention in wholesale power markets.

Conrad's Utility Investor

Invest Smarter! Join Conrad’s Utility Investor!

What sets renowned income-investing expert Roger Conrad apart from the pretenders? His more than two decades of covering utility stocks and essential services—a wealth of knowledge and experience that you can’t find anywhere else.   

Smart investing. Taking advantage of real opportunities and not fads (and knowing the difference). Finding the companies and stocks that will deliver for the long haul, so investing lets you live instead of investing turning into your life. Roger Conrad has dedicated his career to these principles—and that’s what Conrad's Utility Investor delivers.

Subscribe today for instant access to a treasure trove of investment insight and knowledge, as well as Roger’s exclusive model Portfolios and ratings of more than 200 essential services.

MODEL PORTFOLIOS & RATINGS

ABOUT ROGER CONRAD

Roger S. Conrad needs no introduction to individual and professional investors, many of whom have profited from his decades of experience uncovering the best dividend-paying stocks for accumulating sustainable wealth. Roger b