Roger S. Conrad

We still have a few weeks left in 2020. But whatever happens, this will go down as one of the most eventful years in stock market history. There’s certainly plenty to recap already. The rapid swing from historic profit-taking opportunity in mid-February to equally compelling Dream Buy barely a month later is certainly without precedent in my career.

Avoiding companies at elevated risk to dividend cuts is a time-honored tenet of income investing. That’s because reductions typically add insult to injury by triggering selloffs in offending stocks.

If you’re underwhelmed so far by the next generation of wireless communications—dubbed 5G—you’re far from alone. By any measure, this has been a year of exploding demand for fast and reliable connectivity with work, schooling and entertainment shifting to residences. Not one US communications company, however, has meaningfully broken down 5G adoption for investors, a fact reinforced by generally flat Q3 wireless revenue growth.

What’s a well-run fiber broadband network worth these days?

Now more than ever, it’s a seller’s market for bonds of regulated electric, gas and water utilities. But our list of Fixed income picks features four bonds that trade below our recommended buy prices and meet my cardinal rule for buying any bond or preferred stock.

From all indications, 2020 has been the worst wildfire season in California’s history. And the state is hardly alone in its misery, as an unprecedented combination of wind gusts and dry conditions have also inflicted record damages throughout the West and Rocky Mountain states.

Economics not politics are what ultimately drive investor returns. And as this month’s Utility Report Card comments show, Q3 results and guidance are quite strong for the vast majority of the nearly 200 essential services companies we track.

The utilities sector also continues to get a lift from M&A. Since the October feature article went to post, two all-cash deals have been announced. One of them involves Conservative focus stock Avangrid Inc (NYSE: AGR). The other is the nearly 60 percent premium offer for one of last month’s picks Alaska Communications (NSDQ: ALSK).

Back in January, I added unregulated electricity generator and retailer Vistra Energy (NYSE: VST) to the Aggressive Holdings for three reasons.

First, the company is a cash machine, consistently shaving costs from its business and debt from its balance sheet while gaining market share with acquisitions and “greening” its generation fleet. Second, its shares traded at a major valuation gap I thought would close as the US economy strengthened. And third, there was a growing possibility of a takeover, potentially by private capital.

Conservative Holding Avangrid Inc (NYSE: AGR) hasn’t raised its dividend since July 2018. Not surprisingly, its returns have since lagged the Dow Jones Utility Average by more than 25 percentage points.

Two major developments in the past month promise a favorable reversal of fortune, even as shares have dropped roughly 10 percent to an attractive entry point.

Economics not politics drive investment returns. Don’t get me wrong. Our Portfolio stocks came out very well in the recent election as businesses, future regulatory relations being the key concern.

The renewable energy focus of our electricity stocks is tailor-made for a new White House that will if anything try to speed up America’s ongoing energy transition. And the offshore wind stocks highlighted in the feature article are likely to be the next sector picks to pop, following example of contract generators like Brookfield Renewable Energy Partners (TSX: BEP-U, NYSE: BEP).