Roger S. Conrad

There are about three months remaining in 2019, and much can still happen. But up to now, it’s been a quite profitable year for Conrad’s Utility Investor Portfolios.

Buckeye Partners (NYSE: BPL) exited the Endangered Dividends List last spring, following its all-cash takeover offer of $41.50 per share from Australia’s IGM Investors in May. Last week, the deal inched closer to a fourth quarter 2019 close, as the Committee on Foreign Investment in the US and Pennsylvania Public Utilities Commission signed off.

The Dow Jones Utility Average has returned 15.1 percent annually since the start of the bull market in March 2009. So far in 2019, the pace has been twice that.

Utility stocks have benefitted from the desire to buy American in a trade challenged world, their reputation for solid defense, falling interest rates’ positive impact on borrowing costs and yield appeal, and the outlook for accelerating earnings growth next year while other industries stall.

The strong US dollar, worries about slowing global growth and disruption from uncertain politics and trade policy: That trio of entrenched trends continues to fuel investor appetites to “buy American,” dividend-paying stocks of US-based companies that generate all or mostly all of their sales within our borders.

The biggest regulated utility bankruptcy in history has entered a new phase, as California's PG&E Corp (NYSE: PCG) now has a deadline to meet in order to participate in the state's wildfire "insurance" plan.

Can the sum of the parts actually be greater than the whole? Shareholders of AT&T Inc (NYSE: T) will get a chance to find out, now that activist investor Paul Singer’s Elliott Management has taken a $3.2 billion stake in the communications giant.

Utility stocks set another series of records last month. As a result, price/earnings multiples are again moving toward the stratosphere. Meanwhile, dividend yields are scraping lows last seen immediately prior to the big declines of 2001-02 and 2008-09. 

Roughly a year ago, deep-pocketed Global Infrastructure Partners replaced downsizing NRG Energy (NYSE: NRG) as Clearway Energy’s (NYSE: CWEN) primary owner and sponsor. We immediately added the yieldco to our Aggressive Holdings, anticipating faster cash flow and dividend growth.

Over the past 15 years, Conservative Holding Pembina Pipeline Corp (TSX: PPL, NYSE: PBA) has endured two wholesale depressions in Alberta’s energy patch—and the Canadian government’s death sentence on its former income trust structure.