Roger S. Conrad

Who says the bond market is washed out? Certainly not Verizon Communications (NYSE: VZ).

The company’s record $49 billion bond sale has not only locked in financing for its $130 billion buyout of Vodafone Plc’s (London: VOD, NYSE: VOD) minority stake in Verizon Wireless. But it was actually doubled, eliminating the need to raise funds in Europe.

Utility stocks have posted fourth-quarter gains 36 times since 1969. But last year the Dow Jones Utility Average dropped almost 4 percent, virtually all of it during the first two weeks of November.

As we enter the fourth quarter of 2013, a number of trends and developments have investors flashing back to the final three months of last year.

The government is again in budget disarray and the deadline for default is fast approaching. The US economy is still plodding, with second quarter GDP growth of 2.5 percent. The gap between rich and poor nations in the eurozone continues to grow. And softer Asian growth is still shaking up global natural-resource markets.

But there are differences from last year.

For one thing, the stocks are cheaper. Despite what’s shaping up as a solid year for business, conventional wisdom since late April has held that dividend-paying stocks are bond substitutes—and that a change in Federal Reserve policy to “tapering” is about to drive them off a cliff.

My feature article presents more evidence that the bearish thesis about utilities' sensitivity to interest rates is more sensationalism than sense. But the more important question is, what if great companies sold off enough to make them bargains again?

The weight of evidence in this month’s Utility Report Card indicates that real bargains have emerged, three of which I am adding to my Conservative Income Portfolio. 

Forget what you’ve read about iOS7, iPhone 5C, China sales and the rest of the various and sundry device hype. Put your money in AT&T (NYSE: T), not Apple (NSDQ: AAPL).

There was plenty to talk about this week from telecom to utilities to energy MLPs.

The Environmental Protection Agency's ongoing crackdown on carbon dioxide emissions from coal-fired power plants continues to dominate the headlines. But investors shouldn't overlook the importance of utility-regulator relations at the state and local level.

Dominion Resources (NYSE: D) shares hit an all-time high this week. The catalyst: A proposed spin off of the company’s natural gas assets into a master limited partnership (MLP), with an initial public offering in the second quarter of 2014.

Here’s the news from our Portfolio holdings over the past week. 

When the research firm Hedgeye came out with a report blasting a long-time favorite of mine—Kinder Morgan Energy Partners (NYSE: KMP)—my first question was what have they seen that I have not to date? Is there something most of us who research this master limited partnership have overlooked, some critical Achilles heel that could in Hedgeye’s words make Kinder and related companies a “house of cards?”

Similarly, I wondered why Hedgeye had chosen to pick on Kinder, rather than a master limited partnership (MLP) with more obvious troubles such as NuStar Energy (NYSE: NS). The latter, for example, has failed to cover its distribution with distributable cash flow (DCF) for several quarters now, even leaving aside its extremely aggressive capital spending.

Claims that Kinder Morgan Energy Partners LP (NYSE: KMP) is a "house of cards on the verge of collapse" amount to nothing more than a cry for attention.