Bear Market Values in a Wobbly Market

Welcome to the 101^st issue of Conrad’s Utility Investor. And here’s to the next 100 plus!

With another coronavirus variant emerging and inflation the highest since 1982, it’s small wonder stocks are wobbling. But despite broad market uncertainty, the Dow Jones Utility Average is performing better than it has all year, up 8 percent since the end of September.

Utilities are the rare sector where earnings and dividends have grown into bull market prices. That’s no guarantee they won’t sell off if the stock market heads down. But investors with a longer-term horizon can buy the best in class at prices ensuring 10 percent plus annual returns, provided companies stay strong on the inside.

That’s not always a guarantee. In fact, it’s decision time for our two biggest losers this year: AGL Energy (ASX: AGL, OTC: AGLXY) and AT&T Inc (NYSE: T).

New Mexico regulators’ decision to reject the proposed acquisition of PNM Resources (NYSE: PNM) is cause to review our position in Avangrid Inc (NYSE: AGR). And a number of recommended stocks are on my “Trading Above Target list, making them holds for now.