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NextEra Energy Partners: The Comeback is Just Beginning

By Roger S. Conrad on Jan. 11, 2024

Last year’s big drop in shares of NextEra Energy Partners (NYSE: NEP) and parent NextEra Energy (NYSE: NEE) was sudden and staggering. Ironically, their recovery should be just as breathtaking. In the October 5 Income Insights “Regarding NextEra,” I stated the case for a comeback. And since then, the parent has returned nearly 30 percent, while Partners has gained almost 50 percent. Here’s why I think that’s just the beginning.

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.

A Solid 2023 but a Better 2024

By Roger S. Conrad on Jan. 11, 2024

Calendar year 2023 is in the books. Our Aggressive Holdings managed a 9 percent average return. Conservative Holdings dropped -2.6 percent and the Top 10 DRIPs lost -1.9 percent. Those returns compare to a -5.2 percent decline in the Dow Jones Utility Average. Other indexes relevant to portfolio holdings include the Alerian MLP Index (up 25.4 percent), iShares Select Dividend ETF (up 1 percent), the Nasdaq Clean Energy Index (-9.8 percent) the S&P Energy Index (-1.4 percent) and the S&P Telecom Services Index (up 2.7 percent).

Dividend Cuts in 2024: Rare and Likely Strategic

By Roger S. Conrad on Jan. 11, 2024

Six companies in the Utility Report Card coverage universe cut dividends in 2023. That’s been about the average count for most years since the mid-1980s, when I began tracking utilities and essential services stocks. But having so few last year was quite a demonstration of sector resilience.

Picks and Pans for 2024

By Roger S. Conrad on Jan. 11, 2024

Cutting debt, strategic M&A and regulatory breakthroughs were “in” last year. High levels of debt and renewable energy were “out.” That’s the verdict of my annual roundup of utility and essential services company returns, highlighted in this month’s Utility Report Card. Divergence between individual companies in 2023 was roughly the same as in 2022, with 216.2 percentage points separating the top and bottom of my table “Best and Worst of 2023” versus 206.6 a year ago. And thanks to a pair of massive sector out-performances, my 2023 picks narrowly edged the pans—with both groups topping the Dow Jones Utility Average by more than 20 percentage points.

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.

Hannon Armstrong Sustainable: It’s All About the Spread

By Roger S. Conrad on Dec. 11, 2023
The first time I added shares of Hannon Armstrong Sustainable Infrastructure (NYSE: HASI) to the Aggressive Holdings, we cashed out with a return of about 300 percent. My attempt at a reprise has so far been somewhat less successful. Hannon has met management’s guidance for 10-13 percent annual distributable earnings growth, as well as target yearly 5 to 8 percent dividend increases. The dividend itself is 13 percent higher than when we entered in early 2022, with another boost ahead for February.

SSE Cuts: That Makes Six for 2023

By Roger S. Conrad on Dec. 11, 2023

UK electric utility SSE Plc (London: SSE, OTC: SSEZY) has “rebased” its twice-annual dividend to a new rate of 60 pence, starting with the March 2024 payment. That’s roughly -38 percent less than the previous annualized rate of 96.7 pence. As noted in my Utility Report Card comments, management stuck to its previous full-year FY2024 (end March 31) earnings guidance range, with a mid-point of GBP1.50 per share. That was despite what appeared to be disappointing results for the first half (end September 30), as adjusted EPS sank by roughly -11 percent.

Rotation or Recession, We’re Ready

By Roger S. Conrad on Dec. 11, 2023

Will a massive sector rotation propel market averages to new heights in 2024? Or will a bursting of Big Tech’s valuation bubble combine with a weakening economy and relentless upward pressure on interest rates to send the autumn recovery into full reverse? Either way, the stocks in the CUI Aggressive, Conservative and Top 10 Holdings portfolios are ready. That follows the release of strong Q3 results and guidance updates that frankly seemed to shock many.

Big Yield Hunting in a High(er) Rate World

By Roger S. Conrad on Dec. 11, 2023

When investment markets get roiled, most people assume the future holds more of the same. And so it is with the nearly unanimous consensus forecast of “higher for longer” interest rates. I still see a decent chance the Federal Reserve will raise the benchmark Fed Funds rate at least one more time this cycle, to bring its benchmark for inflation back to a long-term target rate of 2 percent. But so far as borrowing costs are concerned, the damage is done.



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