Roger S. Conrad

Verizon Communications (NYSE: VZ) was first to prove the potential of 4G wireless. So when rival T-Mobile US (NSDQ: TMUS)—Deutsche Telekom’s (Germany: DTE, OTC: DTEGY) US unit—appeared to take the lead rolling out 5G, many have assumed the company has passed the torch of industry leadership.

Since the July issue went to post, the Dow Jones Utility Average has generally trended higher. The result is the half-year return of less than 3 percent has grown to over 9 percent. One key reason: Solid Q2 results and strong guidance updates issued by the average’s 15 members. That includes this month’s Aggressive Focus stock AES Corp (NYSE: AES).

Announce a headline-worthy M&A transaction and promise meaningful debt reduction and stock buybacks. Then warn of a future unspecified dividend reduction after the close.

It’s still just a bill. And there will be many chances to sink it in the coming weeks, from Democrats’ insistence on moving a much larger package to Republican opposition to any compromise ahead of 2022 Congressional elections.

Our best in class utilities and essential services companies proved their resilience in pandemic-riddled 2020.

I’ve been an adult volunteer for Scouting BSA since my oldest son entered Tiger Cubs almost 20 years ago. So I wasn’t going to pass up the opportunity to accompany my youngest to Philmont Scout Reservation in northern New Mexico earlier this month, my third and likely final trek to scouting’s paradise.

Unlike the highways my oldest son and I took on our cross-country journey in early June, there’s not a lot of connectivity in the backcountry. And I’d never have been able to stay off the grid were it not for the support of Elliott Gue, my partner of more than 8 years at Capitalist Times.

Nonetheless, as with the June trip, I picked up several investment insights I’d like to share with you now.

America’s electric utilities are on track for a 10^th consecutive year of record capital spending in 2021, according to numbers compiled by the Edison Electric Institute.

That’s closely followed by the $70 billion plus the country’s five largest communications companies plan to spend this year, rolling out 5G wireless and expanding fiber broadband connections. And while pipeline construction remains highly contentious in many places, spending on gas and water systems also remains at elevated levels.

The history of utilities is packed with examples of management getting badly burned by investing outside regulated operations. That tends to keep stocks of companies that do at big discounts to their peers, as Southwest Gas Holdings (NYSE: SWX) is at 15.7 times expected next 12 months earnings.

Conservative Holding Sempra Energy (NYSE: SRE) this week raised the mid-point of its 2021 earnings guidance range to $8.05 per share, a significant leap from the previous $7.80. That’s just one of the highlights from its June 29 Strategic Update and Financial Outlook.

The Aggressive Holdings returned an average of 7.95 percent in the first half of the 2021. Conservative Holdings came in at 5.28 percent, while Top 10 DRIPs did the best at 12.34 percent. The average return for all 41 stocks across the portfolios was 8.1 percent.