Roger S. Conrad

Not even rock-solid business resilience to Covid-19 fallout has been enough to swing US electric utilities from laggards to leaders this year. But another wave of mergers and acquisitions just might do the trick.

Everyone loves a bargain. But when a stock trades at a big discount to market or sector averages, there’s always a reason. And to move to a higher price, the company must face its challenges.

Want to invest in transforming developments like renewable energy, 5-G, smart cities and electric vehicle adoption?

You could roll the dice and bet Tesla Inc (NSDQ: TSLA) adds to gains that once approached 500 percent year-to-date. Or you could jump on the companies in the feature article, for compelling yields and far more reliable growth.

More than two-thirds of new power generation capacity installed worldwide this year was wind and solar. And in the US, most was either long-term contracted or entered utilities’ regulated rate base. In fact, all of the world’s leading developers of renewable energy now are utilities, led by America’s top wind and solar producer NextEra Energy (NYSE: NEE).

Clearway Energy (NYSE: CWEN) rewarded our patience last month by restoring quarterly dividends to a rate of 31.25 cents per share. The move initially pushed the stock to a new high in the upper-20s. But it also apparently convinced some investors the big gains are done, a mistake the sellers will likely regret.

Barely a century ago, Americans enjoyed plentiful, clean and practically free drinking water. Now ensuring safe supplies and treating waste is an increasingly essential and rapidly growing $200 billion plus global market. Among the surest beneficiaries: The handful of US investor owned utilities, headlined by Conservative Holding Essential Utilities (NYSE: WTRG).

Over the last 12 months, an investment in the Russell 1000 Growth Index has outperformed an identical stake in the Russell 1000 Value Index by more than 40 percentage points. That’s not just unprecedented outperformance. It’s unsustainable: Sooner or later, either value stocks will catch up with a strong rally, or growth will fall back.

The price of oil has been steady for a while around $40 a barrel and natural gas is over $2.50 per thousand cubic foot. But some energy companies are still downsizing dividends. Origin Energy (ASX: ORG, OTC: OGFGY) is cutting its semi-annual dividend for October to 10 cents Australian. That’s haircut of roughly one-third for the Australian power producer, electricity retailer and LNG investor.

Try “googling” popular investment media for “renewable energy” stocks—odds are you’ll be bombarded by references to Tesla Inc (NSDQ: TSLA), and otherwise scores of earnings-free companies you’ve never heard of.

That description fits to a “T” the vast majority of the 88 members of the WilderHill New Energy Global Innovation Index (NEX). The index itself is up nearly 50 percent year-to-date.

Chronic share underperformance, weak Q2 operating results and still-heavy debt raise the question - is it time to sell AT&T (NYSE: T)?

Is the world’s economic cup half empty or full? With the fog of the November election campaign season fully descended, politics is affecting how many are answering that question.