Roger S. Conrad

We examine the complicated world of incentive distribution rights and why the recent restructuring of Enbridge Energy Partners LP's partnership agreement is such a big deal.

A growing, capital-intensive business must regularly be fed with sales of debt and equity. Investors almost invariably fear such offerings as either dilutive or incurring more debt. But the lowest corporate borrowing rates in a generation have enabled companies to cut interest expenses with new debt offerings, eliminating their near-term exposure to rising rates. This week, we look at six Conrad's Utility Investor Portfolio holdings that have had recent offerings.

Now more than ever, investors looking to profit from the US energy boom must also pay attention to regulatory and legislative developments in Washington.

There’s nothing like a convincing rally to silence bears. And utilities are still the best- performing sector this year, with the S&P 500 Utilities Index beating the S&P 500 by better than a 2-to-1 margin.

Our three Conrad’s Utility Investor Portfolios—Aggressive Income, Conservative Income and Top 10 DRIPs--have fared well, adding to solid 2013 gains. The biggest winners have been companies that analysts shunned earlier in the year; for example, formerly out of favor Exelon Corp (NYSE: EXC) has returned almost 40 percent.

Outperformance, however, should never be taken for granted. Even in sectors as stable as essential services, the high and mighty frequently change places with the outcasts.

Our best power play in Asia owns and operates high-quality electric power assets in Southern China and India--two markets with the best prospects for demand growth--and its empire is poised to keep overall earnings and dividends growing.

Hedgeye and Barron's called Kinder Morgan Energy Partners LP and its general partner, Kinder Morgan Inc. a "house of cards."  Richard Kinder, the partnership's Chairman and CEO, responded, "I'll buy, you sell and we'll see who's right."  Since then, this diversified owner of fee-based midstream assets has beaten its own first-quarter guidance, turning the market and burning the critics.

Our Portfolios are a mixed bag in terms of their underlying businesses and growth drivers. But our holdings are on track for solid earnings and dividend growth over the long haul. These names don’t respond uniformly to changing business conditions or short-term market moves so diversification is key to reduce volatility.

Four of the holdings in our Endangered Dividends List still have potential upside, but a questionable acquisition by one propane distributor rates a sell call.

Although the S&P 500 Utility Index has outperformed every other economic sector in the S&P 500 this year, disciplined investors have ample opportunity to lock in above-average yields on some of our favorites.

Exelon Corp (NYSE: EXC) continues to reward shareholders, topping the Dow Jones Utilities Average (DJUA). We also look at four other DJUA stocks from our Model Portfolios.