Roger S. Conrad

Roger Conrad will host an online chat for Conrad's Utility Investor subscribers on Sept. 13, 2018 at 2 PM EDT.

Last year’s devastating northern California wildfires won’t bankrupt the state’s largest utility, nor will future natural disasters permanently damage other in-state electric and gas providers. Here's why.

Political upheaval has pushed the Australian dollar to its lowest point in two years as an energy crisis has rocked the country, but the best in class is still worth our investment dollars.

This week, Barron’s “5 Dividend Standouts,” asserted that “finding stocks with both attractive yields and strong dividend growth isn’t easy.” But I take issue with the article’s implication that individual investors can’t find stocks with generous and growing dividends on their own when there are 8 rock-solid, buy-rated essential services stocks in our Conservative Income Portfolio right now, yielding an average of 6 percent.

With this bull market so long in the tooth and with so many potential ways for it to end, does it really make any sense to be thinking about buying stocks now? Here's why it pays to stick around.

All Conrad’s Utility Investor Portfolio companies have now reported calendar second quarter results and updated their guidance, and all but TerraForm Power (NSDQ: TERP) are highlighted in the August issue Utility Report Card.  

When I started in this business, individual investors dominated daily trading. Now, even decisions by professional stock pickers are eclipsed by passively run pools of capital, governed by algorithms executed by artificial intelligence. The consensus seems to be this is simply the next phase of evolution. After all, computers trade at multiples the speed of ordinary humans and without the emotion that’s often the biggest failing of investors. The problem is capital governed by algorithm faces the same conundrum as do large funds run by managers: The larger the pool, the smaller the list of stocks available to trade without moving the market, no matter how sophisticated the programming. And that’s leaving aside the fact that many algorithms are written with similar objectives--i.e. to beat the S&P 500 and other benchmarks—and are therefore likely to take similar actions at the same time. We’ve yet to see passive investing strategies tested in a crisis. But we already know that over any meaningful period of years, pools of capital using passive strategies such as the Vanguard Target Retirement funds have dramatically underperformed market averages. We also know that price momentum created by passive strategies creates opportunities to buy lower and sell higher than in previous market cycles. Taking advantage does require knowing whether a fallen company is still strong on the inside, or if a high flyer has exceeded any reasonable gauge of value and is likely to take a tumble. But by following a disciplined strategy of seeking quality and waiting for the right price, we’re going to find many more opportunities like March Focus stock AES Corp (NYSE: AES), which has since returned upwards of 30 percent.

Back in February, Hannon Armstrong Sustainable Infrastructure (NYSE: HASI) announced it wouldn’t raise its dividend this year. We didn’t like the freeze but agreed with management’s desire to instead build coverage and fund growth, while absorbing the expense of converting then-hefty variable rate debt to fixed rates.

Conservative Holding Brookfield Renewable Partners L.P. (TSX: BEP-U, NYSE: BEP) is lower by about 11 percent in US dollar terms this year. That’s 11 percentage points worse than the Dow Jones Utility Average and 18 points behind the S&P 500. But Brookfield’s stumbling share price is a stark contrast to an underlying business that’s stronger than ever, underscored by a 6 percent plus dividend still on track for 5 to 8 percent long-term annual growth.