Feature Article

Competition from “associated” natural gas in Texas and scarce takeaway capacity are weighing on the price of natural gas produced in Appalachia. That’s triggered a meltdown of regional producers in 2019, including a 50 percent plus decline in the largest, EQT Resources (NYSE: EQT).

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).

Only four of the 21 current Conservative Holdings trade below our maximum recommended entry point. That’s counting new addition and this month’s conservative focus stock South Jersey Industries (NYSE: SJI).

It’s survival of the fittest in the communications sector. And as rising competition, surging capital spending and tough regulation shrink free cash flow, the wave of dividend cuts is hitting all but the largest and strongest players.

Cheap to mine, easy to burn and abundant almost everywhere: It’s easy to see why coal became the primary fuel for a century plus of global electrification. In fact, up until very recently, demand growth was actually accelerating. 

Roughly four years ago, Atlantica Yield’s (NSDQ: AY) largest shareholder Abengoa SA (Spain: ABG) filed bankruptcy. The move restricted cash flows from facilities the pair held in common. And as a result, the yieldco was forced to suspend dividends until September 2016, when it resumed at a quarterly rate that was barely one-third the former payout.

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.

US/China trade deal optimism has gained steam this month. That’s pushed up the yield on the 10-year Treasury bond to its highest level since late July. And the result has been a mini-sector rotation out of many dividend-paying stocks.

Deutsche Telekom (Germany: DTE, OTC: DTEGY) cut in its annual dividend to 60 Euro cents, from last year’s 70 Euro cents rate. The move surprised us because business is good.

Elections have consequences. And that goes double when you operate a heavily regulated essential services business.

For most US states and localities, 2019 has been an off year with few contested races to bring voters to the polls.