Roger S. Conrad

Five Endangered Dividends List companies cut dividends last month. For Covanta Holding (NYSE: CVA), NuStar Energy (NYSE: NS) and Royal Dutch Shell (NYSE: RDS/A), the decision was all about COVID-19 fallout.

The Dow Jones Utility Average is nearly 30 percent higher than where it closed March 23. But since mid-April, utilities and essential services stocks have essentially run in place. In fact, most have given back a fair portion of their recovery, as increasingly excited investors have gravitated to traditional “growth” sectors.

Roger Conrad will host an online chat for Conrad's Utility Investor subscribers on May 14, 2020 at 2 PM Eastern time.

Heading into Q1 earnings reporting season, the big question for electric utilities was how big a hit COVID-19 fallout would deliver to demand for power. Now we have answers from first reporter NextEra Energy (NYSE: NEE).

In 2017, financially recovering Kinder Morgan Inc (NYSE: KMI) promised investors three dividend increases. This week, for the third increase it offered up a 5 percent lift for 2020, just 20 percent of what was promised. Under normal conditions, I’d view a shortfall like this as a potential warning of underlying business weakness. In Kinder's case, here's why it's not.

AT&T Inc’s (NYSE: T) Q1 results answer two key questions about COVID-19 fallout and the telecom giant's resiliency.

Before COVID-19, renewable energy was a bona fide, red-hot global investment theme. But the prospect of a deep recession has caused many consumers to reconsider making big purchases like rooftop solar systems.

With the virus still spreading and shutdowns continuing, forecasting COVID-19’s eventual damage to human health and the global economy is still a matter of conjecture, making it difficult for management teams to set guidance for the rest of 2020.

However, Q1 numbers and guidance, to be released over the next several weeks, will be absolutely critical to making good decisions, particularly where dividend safety is concerned.

Over the past two weeks, the Dow Jones Utility Average has recouped nearly two-thirds of its initial bear market plunge. That’s the sector’s most dramatic two-week rally in history, following its most brutal one-month selloff.

Along the way, we’ve been able to buy every Portfolio stock below its maximum entry point. And 30 have traded under “Dream Buy” prices, levels only reached under extreme conditions like those we’re living through now.

The question now is will utilities’ current “V” shape recovery continue? Or will stocks follow the pattern of every previous market and at least retest the lows?

On the positive side, the spread of COVID-19 appears to have eased up in some hard-hit areas, particularly China. That’s raised hopes the world can go back to work in the relatively near term.