Roger S. Conrad

Even if the stock and bond markets manage a year-end rally of historic proportions, 2022 will go down as one of the more challenging for investors in memory. But with basically three weeks left in the year, the Dow Jones Utility Average is still very much in the black.

The Endangered Dividends List has two new members this month: Algonquin Power & Utilities (TSX: AQN, NYSE: AQN) and Vodafone Group (London: VOD, NYSE: VOD).

For most of the past two decades, it’s been a sellers’ market for bonds and fixed income. Large institutions like pension funds have had literally no choice but to fill the bond portion of portfolios with whatever was for sale. And even when there’s been upward pressure on rates, financially strong companies have been able to wait for what’s been an inevitable return to better conditions—and the chance to issue new bonds at lower coupon rates.

Q3 numbers and guidance updates are almost all in. And rarely if ever have I seen results so immediately consequential for utilities and essential service stocks—as investors ascertain whether business growth plans will withstand headwinds from inflation, rising interest rates and a potentially severe recession.

The 42 Utility Report Card companies raising guidance have answered any questions about their strength for now. And their stocks have staged a big recovery rally from October lows. That includes several companies that faced extreme doubt going into reporting season, notably Aggressive Focus stock AT&T Inc (NYSE: T) and Hannon Armstrong Sustainable Infrastructure (NYSE: HASI).

Utilities’ investment plans require regulatory consistency to be successful. And for Conservative Holding WEC Energy Group (NYSE: WEC), November election results were pretty close to optimal for its $20.1 billion, 5-year CAPEX plan, increased this month from $17.7 billion.

Owning shares of AT&T Inc (NYSE: T) has been an exercise in patience since the retirement of visionary CEO Ed Whitacre—who forged the modern company by combining wireline and wireless franchises of four “Baby Bells” and several regional service providers.

When the October issue of CUI posted, the Dow Jones Utility Average was underwater nearly -10 percent for the year. Now it’s close to even including dividends. That strong recovery also shows up in a brief scan of stock prices in this month’s Conservative Holdings, Aggressive Holdings and Top 10 DRIP tables. But it wasn’t exactly a buy everything moment either.

Wireline communications company Lumen Technologies (NYSE: LUMN) eliminated its quarterly cash dividend this month. That brings total year-to-date cuts in the Utility Report Card coverage universe to nine.