Roger S. Conrad

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.

Net zero emissions of carbon dioxide by 2050: We’ve now heard that promise made by dozens of countries as well as US electric and natural gas utilities. Even midstream energy companies have joined in. And 1,185 corporations worldwide have now signed onto the Science-based Targets Initiative framework, slated for publication in November of this year.

Roger Conrad will host an online chat for Conrad's Utility Investor subscribers on Feb. 11, 2021 at 2 PM Eastern time.

Renewable energy stocks were popular well before the recent US elections. Since then they’ve really blasted off, but one group of renewable energy stocks have yet to feel the love.

Getting Kinder Morgan Inc's (NYSE: KMI) Permian Highway Pipeline on line and running was not without obstacles. And getting it past fierce opposition testifies to the strength of Kinder’s management

For the most part, 2020 was a year when winning stocks kept moving higher. Underperformers remained stuck in neutral or worse.

Renewable energy companies’ abrupt conversion from value to momentum stocks was by far the most positive story in the Conrad’s Utility Investor coverage universe in 2020. Nine of the top ten performers owned their gains to a sharp uptick in investor enthusiasm for wind, solar, battery storage and electric vehicles.

Conversely, many other essential services companies I track are still one-third or more off their highs of last February. And the result was the largest performance gap in the history of this advisory, some 843 percentage points between the biggest winner and loser.

Takeover activity was the bright spot in an otherwise gloomy year for communications, with two more deals closing in December. New Aggressive Holding Telephone & Data Systems (NYSE: TDS) is this year’s most eligible candidate for a high premium offer.

Locked in 6 to 8 percent annual earnings growth secured by steady rate base expansion; Strong regulatory relations in 8 southern states, particularly Texas; A dividend that’s nearly doubled over the past decade and is still covered better than 2-to-1 by profits; A secure A-rated balance sheet and operating metrics routinely at the top for natural gas distributors.