A growing, capital-intensive business must regularly be fed with sales of debt and equity. Investors almost invariably fear such offerings as either dilutive or incurring more debt. But the lowest corporate borrowing rates in a generation have enabled companies to cut interest expenses with new debt offerings, eliminating their near-term exposure to rising rates. This week, we look at six Conrad's Utility Investor Portfolio holdings that have had recent offerings.
Energen Corp (NYSE: EGN) will sell its Alabama gas distribution utility to Laclede Gas (NYSE: LG), for $1.28 billion in cash plus $320 million in assumed debt. The company will deploy the estimated $1.1 billion in after tax proceeds to further develop its high potential properties in the Permian Basin.
Fourth quarter and full-year earnings normally dominate the news this time of year. And rightly so: They’re what ultimately shape shareholder returns.
The Conrad’s Utility Investor Portfolios officially launched on July 31, 2013. Since that time, the Dow Jones Utility Average is off -2.3 percent, including dividends paid.
My Aggressive Income Portfolio is up by 9.3 percent, while the Conservative Income Portfolio has returned 3.3 percent.
Will Santa Claus visit utility stock investors this year? The sector was out of the gate quickly to start the fourth quarter of 2013. But concerns about the “tapering” off of Federal Reserve bond buying quickly slowed things down.
Fear of rising interest rates again appears to be triggering selling of utility stocks. I’ve shown over and again that the sector’s so-called interest rate sensitivity is a false relationship over any recent period longer than a few weeks. Consequently, lower prices should be viewed as a buying opportunity for recommended stocks.
Roger's favorite utilities for investors seeking superior price appreciation by taking calculated risks.
Harness the tried and true wealth-building power of rising dividends.
Nothing compounds wealth like reinvesting a rising stream of dividends.
Warning: Falling Dividends.
Roger's current take and vital statistics on more than 200 essential-services stocks.