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Conservative Income Feature

Sempra Energy: Serving 2 Great States Plus LNG

By Roger S. Conrad on Mar. 11, 2024
Conservative Holding Sempra Energy (NYSE: SRE) last month raised its five-year capital-spending plan by 20 percent to $48 billion. One big reason we can be confident management will turn that into robust earnings growth: 90 percent is targeted for already regulator-approved utility system investment in California and Texas. The rest will finance a portfolio of high return, pre-contracted LNG and renewable energy projects in the southwest US and Mexico. California’s drive to simultaneously electrify everything and stanch the danger of wildfires is spurring an earnings-lifting CAPEX bonanza for its utilities. That includes natural gas, as the realization energy transitions take time convinced regulators to authorize a 50 percent capacity boost at Sempra’s Aliso Canyon storage facility—which some wanted to close not long ago. And state law linking utility returns to interest rates has seen returns on equity surge to over 10 percent this year.

Brookfield Renewable: Scaling Up for Faster Growth

By Roger S. Conrad on Feb. 12, 2024

For Conservative Holding Brookfield Renewable (TSX: BEP-U/BEPC, NYSE: BEP/BEPC), last year was the best for business yet. Funds from operations per unit increased 7.1 percent, supporting a 5.2 percent dividend increase—which could have been meaningfully higher had management not elected to accelerate investment. Brookfield added a record 5 gigawatts of renewable energy projects to its backlog during the year, well ahead of the previous year’s 3.5 GW. That boosted its “advanced stage” development platform to 24 GW. And 90 percent of the new contracts are with corporate customers, much tied to data centers seeing accelerating electricity demand from artificial intelligence.

TC Energy: Steady Dividend with Strategic Upside

By Roger S. Conrad on Jan. 11, 2024

It’s fair to say Conservative Holding TC Energy (TSX: TRP, NYSE: TRP) faced a mountain of skepticism from investors last year. That started with significant cost overruns announced at the Coastal GasLink pipeline in late 2022. Many doubted the company would ever finish the project, or execute on funding the additional costs with CAD5 billion of asset sales. And even more have dismissed the planned spinoff of oil pipeline assets as caving into ESG pressures.

WEC Energy Group: Best in Class No Longer at a Premium Price

By Roger S. Conrad on Dec. 11, 2023
For most of the 9-plus years it’s been a Conservative Holding, WEC Group (NYSE: WEC) has been tough to buy at a good price. That’s not the case now with the stock yielding nearly 4 percent, and the upper Midwest utility on track for a 7 percent dividend boost later this week. Much of WEC’s weakness this year is due to generalized utility sector selling. But the company has also seen its historic premium valuations compressed a bit: The forward earnings multiple of 18.5 times is the lowest in more than 8 years, and the stock’s yield is approaching a 20-year high—when the dividend was roughly one-eighth of what it is now.

Dominion Energy: Big Yield and Ready to Recover

By Roger S. Conrad on Nov. 13, 2023

About a year ago, Dominion Energy (NYSE: D) announced a “top-to-bottom” strategic review. Management’s objective: To tackle three headwinds that were rapidly approaching hurricane force. Most important was ensuring the cost of the Coastal Virginia Offshore Wind (CVOW) project wouldn’t balloon as other US offshore wind has. But the utility also had to reach an accommodation with a restive new Republican majority in the state legislature that was determined to roll back Democrats’ signature renewable energy law. And it had to cut parent level and floating rate debt with interest rates soaring.

Duke Energy: Cutting Risk and at a Cut-Rate Price

By Roger S. Conrad on Oct. 9, 2023

Earlier this month, Duke Energy (NYSE: DUK0 closed the sale of its commercial distributed generation unit to a private capital consortium for $364 million. And later this year, it will complete the sale of its utility scale renewable energy unit to Brookfield Renewable Partners (NYSE: BEP, BEPC) for $2.8 billion.

Essential Utilities: Top Quality Water Utility at an Historic Discount

By Roger S. Conrad on Sep. 11, 2023

Adding water and wastewater customers by acquiring cash-poor systems on the cheap, then upgrading systems under reliable rate plans: That’s been the formula for Essential Utilities’ (NYSE: WTRG) reliable 7 to 10 percent annual earnings and dividend growth since the early 1990s, when it was known as Philadelphia Suburban.

Verizon Communications: Priced for Armageddon, Positioned to Prosper

By Roger S. Conrad on Aug. 7, 2023

Rarely have shares of a high quality essential services company like Verizon Communications (NYSE: VZ) been treated so poorly by investors. In the July 18 Utility Roundup “Verizon and AT&T: Some Thoughts,” I highlighted two catalysts for downside this summer: Fear that Amazon.com would offer wireless service through its Prime brand and a Wall Street Journal investigative piece alleging telecoms have potential liabilities in the tens of billions of dollars from owning toxic lead-lined cable.

Brookfield Renewable: Building Scale Affordably for Reliable Growth

By Roger S. Conrad on Jul. 10, 2023

Not once since its November 1999 IPO has Brookfield Renewable Partners (TSX: BEP-U, NYSE: BEP) ever cut its dividend. Nor has the company missed an annual increase since 2009—when the rate was held flat following Canada’s death sentence for income trusts.

Edison International: Rock Solid and Ready for Wildfire Season

By Roger S. Conrad on Jun. 12, 2023

California’s wildfires are getting worse. The state’s electric power grid, however, is systematically becoming more resilient. From 2019-2022, for example, cumulative structures destroyed by wildfires linked to Edison International’s (NYSE: EIX) southern California system were 96 percent less than in the 2017-18 period. And as a result, the company’s post-2018 wildfire liabilities not covered by insurance have been immaterial, versus $8.8 billion incurred in 2017-18.



Roger S. Conrad needs no introduction to individual and professional investors, many of whom have profited from his decades of experience uncovering the best dividend-paying stocks for accumulating sustainable wealth. Roger b