Conservative Income Feature

In the May 23 Utility Roundup, I highlighted Southern Company’s (NYSE: SO) “secret weapon” in its odyssey to bring new nuclear construction over the finish line at the Vogtle site in Georgia: Observation of the startup and two years of operations at four facilities in China, built on the same AP1000 reactor model.

Electric utilities measure life of key assets in decades, rather than months or years. Success not only requires making the right call on what in invest in, but being flexible enough to shift course when circumstances change.

Duke Energy (NYSE: DUK) has demonstrated both this month, shelving its Atlantic Coast Pipeline project with Dominion Energy (NYSE: D). The company’s natural gas power plants will be in business for a while, enabling retirement of 6.5 gigawatts of coal capacity since 2010. The utility plans to retire 900 megawatts more by 2025, while shortening lives of 7.7 GW in North Carolina and Indiana.

Conservative Holding Sempra Energy (NYSE: SRE) has traded as high as $162 and as low as $88 this year. That volatility contrasts sharply with the steady business performance of the diversified utility and midstream energy company, including the robust 8 percent dividend boost this spring.

The customer is always right regardless of what business you’re in. And for regulated energy utilities like Dominion Energy (NYSE: D) now, that means using more wind and solar to generate electricity.

It’s one thing to grow when your industry is booming. It’s another entirely when almost every company is crawling into its shell, if management still has one—but that’s exactly what TC Energy (TSX: TRP, NYSE: TRP) is doing with sub-$5 oil prices in some regions it serves.

Verizon Communications (NYSE: VZ) expects its revenue growth to accelerate to “mid single digits” in 2020 from last year’s 0.8 percent. That’s based on three drivers.

First is continuing Q4’s favorable trends in wireless and broadband customer additions. The second is accelerating growth in business revenue, as advanced services adoption speeds up with 5-G. And the third is stabilized media services sales, following recent streamlining.

Intense competition, hefty capital spending needs and erratic regulation have made the communications sector an investment minefield. But Conservative Holding Comcast Corp (NSDQ: CMCSA) remains a model of consistency, adding new business while growing cash flow and dividends.

In February 2018, I recommended Edison International (NYSE: EIX) as a new Aggressive Holding. Shares had taken just a big hit on concern the company would be held liable for billions in 2017 wildfire damages under the state’s “inverse condemnation” law.

After a decade as the primary focus of utility M&A, regulated assets don’t come cheap. But when a high flyer drops back to a good entry point, we jump. And that’s now the case for natural gas distributor South Jersey Industries (NYSE: SJI).

Sustainability worries about North American shale oil and gas production, governance concerns and an ugly half-decade of dividend cuts convinced many investors to flee the midstream energy sector and never look back.