Shares of transmission line operator ITC Holdings (NYSE: ITC) have dropped more than 14 percent from the all-time highs reached in early November. The immediate catalyst: A group of industrial users have demanded the Federal Energy Regulatory Commission cut its allowed returns.
Utilities pay some of the safest and highest dividends on Wall Street. But they’re stocks, not substitute investments for bonds.
Those who’ve tried to treat them like bonds have consistently underestimated their returns in bull markets, as well as downside in bear markets. Similarly, those who’ve bought when interest rates were falling and sold when rates have risen have routinely paid too much and sold too cheaply. And occasionally as in 2008, they’ve had their heads handed to them.
Roger's favorite utilities for investors seeking superior price appreciation by taking calculated risks.
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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.