Utility stocks have picked up in 2020 where they left off in 2019. The Dow Jones Utility Average reached an all-time high of 934 this week. So long as investors crave yield, there’s a case the sector will reach higher ground - but this story also has a less savory side.
The flow of mergers of entire utility companies has dried up, relative to the heady pace of a few years ago. But management teams are still finding plenty of assets to buy and sell.
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.
Wall Street consensus is the U.S. Federal Reserve will officially close the book on three-and-a-half years of monetary tightening next week, by cutting its benchmark Federal Funds interest rate. But our focus needs to be on earnings and guidance, not headlines.
It seems California Governor Gavin Newsom will not preside over a utility collapse as former Governor Gray Davis did almost 20 years ago, thanks to a legislative fix to state utilities’ bottomless liability for wildfire damages.
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Roger's current take and vital statistics on more than 200 essential-services stocks.