Roger S. Conrad

Investors should take advantage of market volatility and fears of rising interest rates to establish or add to positions in high-quality utility stocks.  

We briefly recap our key takeaways from earnings season and review results from the final three of our Portfolio holdings to report results.

DC regulators dealt a setback to Exelon Corp's pending acquisition of Pepco Holdings, while Southern Company announced an agreement to acquire AGL Resources. Here's our take.

The market's volatility may cause fluctuations in our favorite essential-services stocks, but their dividends remain intact.

Earlier this month, the US Environmental Protection Agency issued final rules designed to limit carbon dioxide emissions from power plants. We run through the winners and losers from this new policy.

With an eye toward future returns, we’ve made a number of moves in the Model Portfolios.

The bull market for stocks that began in March 2009 continues to charge ahead, while volatility, as measured by options trading, remains near an all-time low. However, some sectors and equity groups find themselves in a painful bear hug. The prospect of further downside from crude-oil prices has extended the energy sector’s mauling after a brief recovery rally earlier this year. And the Alerian MLP Infrastructure Index, a capitalization-weighted index of 25 traditional master limited partnerships, has given up almost 40 percent of its value over the past 12 months. Up until a few weeks ago, investors couldn’t get enough exposure to renewable energy, especially rapidly growing yieldcos. But these niche securities have sold off precipitously, with the Bloomberg North American Power Yieldco Index tumbling more than 20 percent since the end of May. Meanwhile, a rampant US dollar has eroded the value of American investors’ international equities and their dividends, though this headwind has abated of late. Amid all these challenges, the Dow Jones Utilities Average has perked up after a difficult spring, rallying 8 percent from its low in late June. Some of these inflows could come from money rotating out of dividend-paying energy stocks, a repeat performance of a trend that emerged when oil prices collapsed in fall 2014. Although the Dow Jones Utilities Average remains well off its high in late January, valuations look reasonable and a period of seasonal strength is just around the corner. More important, earnings have lived up to management teams’ guidance from the beginning of the year. Of the companies covered in our Utility Report Card, 20 revised their guidance higher when they reported quarterly results and 141 maintained their outlook.

In the second half of 2015, our investment strategy remains focused on the long term and opportunistic in the near term.

The bear market in energy stocks continues. But there are still plenty of ways to lock in above-average yields and build long-term wealth with our favorite essential-services stocks.

This spin-off has credible plans to grow its cash flow by 20 percent annually in coming years.