Roger S. Conrad

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.

Roughly 10 percent of Utility Report Card companies have yet to report Q2 results and update guidance. That’s more than enough of a sample to draw one very powerful conclusion:

In the worst economy in 90 years, the utilities and essential services business model has proven its resilience.

Last quarter, US GDP contracted 9.5 percent and most of the world did much worse. But most coverage universe companies posted stable earnings that supported dividends and strong balance sheets. And they kept long-term growth strategies on track.

Utilities that diversify too far from regulated essential services usually wind up getting burned. But once in a while, a company with staying power is in the right place at the right time. That’s the case for MDU Resources.

In the May 23 Utility Roundup, I highlighted Southern Company’s (NYSE: SO) “secret weapon” in its odyssey to bring new nuclear construction over the finish line at the Vogtle site in Georgia: Observation of the startup and two years of operations at four facilities in China, built on the same AP1000 reactor model.