Feature Article

Last July, Dominion Energy (NYSE: D) announced a dramatic and somewhat painful move for shareholders: Selling oil and gas midstream assets to a unit of Berkshire Hathaway (NYSE: BRK/B) for $9.7 billion including assumed debt, and cutting dividends -33 percent to reflect the resulting reduced cash flow.

Last week, the Dow Jones Utility Average hit a new high for 2021. But unlike most market sectors, utilities as a group still can’t seem to get over the hump of making a new all-time high. And as this issue of CUI goes to post, the DJUA is still roughly 2 percent below where it crested in mid-February 2020.

Record fiscal and monetary stimulus, pandemic-disrupted supply chains and an upturn in the energy price cycle are stirring global inflation pressures. Consumer prices rose roughly 5 percent in July across the developed world, with the US leading the way.

Verizon Communications (NYSE: VZ) was first to prove the potential of 4G wireless. So when rival T-Mobile US (NSDQ: TMUS)—Deutsche Telekom’s (Germany: DTE, OTC: DTEGY) US unit—appeared to take the lead rolling out 5G, many have assumed the company has passed the torch of industry leadership.

Since the July issue went to post, the Dow Jones Utility Average has generally trended higher. The result is the half-year return of less than 3 percent has grown to over 9 percent. One key reason: Solid Q2 results and strong guidance updates issued by the average’s 15 members. That includes this month’s Aggressive Focus stock AES Corp (NYSE: AES).