Roger S. Conrad

When a monthly power bill hits $1,700 plus, people are bound to wonder if there’s a better way to run an electricity market.

Single digit temperatures, record snowfall, millions of utility customers without service, nearly one-third of the state’s power generating capacity shut down and spiking electricity prices: That’s the damage so far from the Great Texas Power Crisis of 2021, which continues wreak havoc across the Lone Star State.

Dominion will be an early beneficiary of Biden Administration energy policies regarding permitting for offshore wind facilities.

Writing under the famous pen name Mark Twain, Samuel Clemens coined the phrase “history doesn’t repeat itself, but it often rhymes.”

I’m not the first to apply that bit of country wisdom to investing. But it’s always worth revisiting in the aftermath of extraordinary market events.

Most Utility Report Card companies report their Q4 earnings and update guidance later this month. But what I’ve already seen so far provides plenty of reason to be confident in best in class essential service businesses this year.

That definitely includes the 17 recommendations for which we now have numbers. As I highlight in the Portfolio discussion this month, more than a few of them have also proven to be reliable bellwethers for their respective sectors. And both Conservative Focus stock BCE Inc (TSX: BCE, NYSE: BCE) and Aggressive Focus stock Enel SpA (Italy: ENEL, OTC: ENLAY) are good examples.

Falling deployment costs, favorable regulation and low cost capital are fueling an unprecedented boom in renewable energy adoption. A rare big winners still trading at a fair entry price: Enel SpA (Italy: ENEL, OTC: ENLAY).

In the past year, BCE Inc (TSX: BCE, NYSE: BCE) took hits from pandemic fallout and government pressure to cut broadband and wireless rates. And though less exposed than archrival Telus Inc (TSX: T, NYSE: TU), the company was forced to overhaul 5G strategy when equipment maker Huawei became persona non grata.

We start this month’s Portfolio strategy discussion with the three cornerstones of our investment strategy: 1) Sell stocks of companies that are weakening as businesses, 2) Build a pile of cash by unloading weakening companies and also taking partial profits on favorites that have run to unsustainable valuations, 3) Build a watch list of high quality companies to buy when they hit designated entry points.

Zero companies in our Utility Report Card coverage universe announced dividend cuts last month. To date, only a small number have shared calendar Q4 results and guidance. But that’s still a very good sign managements are comfortable with steps taken so far to deal with what for most are still quite challenging business conditions.