Feature Article
AGL Energy: Staying the Course to Long-Term Dominance
By
Roger S. Conrad on
Jan. 14, 2019
Utilities that go to war with regulators should normally be avoided. The exception this year is Australia’s dominant electric company AGL Energy (ASX: AGL, OTC: AGLXY).
The country holds national elections this year. By every poll, the opposition Labor Party is headed for a potentially big win. And in response, the ruling Liberal/National Party coalition has turned to utility bashing to score political points.
The Low Cost Way to Buy NextEra
By
Roger S. Conrad on
Jan. 14, 2019
NextEra Energy (NYSE: NEE) is both America’s leading producer of wind and solar energy and operator of arguably its healthiest electric utility. So it’s small wonder it’s also the country’s most power stock.
Banking on a Quality Rebound
By
Roger S. Conrad on
Jan. 14, 2019
In 2018, the Conservative Income Portfolio lost 0.76 percent of its value, with our 20 holdings increasing dividends an average of 7.3 percent. The Aggressive Holdings lost -4.9 percent while raising payouts an average of 14.3 percent from the year before. The Top 10 DRIPs slipped -5.8 percent with average dividend growth of 5.9 percent.
Fewer Dividend Cuts Ahead for 2019
By
Roger S. Conrad on
Jan. 14, 2019
Last year, 20 Utility Report Card coverage universe members cut dividends at least one time. That’s a fraction of the 126 that raised payouts, including all the Conservative Holdings and Top 10 DRIPs. But it’s more than we’ve seen since the 2008-09 Bear Market.
Now for some good news: Even if the global economy does slow this year, most essential services companies have adjusted enough to maintain their current payouts the next 12 months.
That should even include most current members of the Endangered Dividends List, despite the weaknesses that landed them there. See this issue’s URC comments for complete analysis of how the coverage universe measures up on our five quality criteria: Payout sustainability, revenue reliability, regulator relations, refinancing risk and operating efficiency.
Picks and Pans for 2019
By
Roger S. Conrad on
Jan. 14, 2019
Diversification and focus on quality don’t prevent every loss. But they’re the best assurance a small setback won’t become a large one, as well as the surest road to ultimate recovery.
That’s food for thought as you peruse last year’s performance of Conrad’s Utility Investor coverage universe stocks. While in 2017 the vast majority produced solid returns, most didn’t in 2018.
The list of winners included takeover targets, trouble-free regulated utilities and some foreign energy stocks. The far longer roster of losers included companies that were already in trouble as well as high quality utilities that simply ran out of gas.
ONEOK Inc: High Growth Midstream in the Sweet Spot
By
Roger S. Conrad on
Dec. 10, 2018
In little more than a decade, shale-drilling technology has converted the US to a net exporter of energy. And frac water recycling, more efficient proppants and use of information technology continue to drive down costs, increasing industry staying power.
Dominion Energy Gets Ready to Roll
By
Roger S. Conrad on
Dec. 10, 2018
It’s been an up and down 2018 so far for Conservative Holding Dominion Energy (NYSE: D). Downside began shortly after New Year’s, following a daring takeover bid for SCANA Corp (NYSE: SCG). That was just as South Carolina regulators and legislators were turning utilities into election year punching bags for cancelling the Summer nuclear construction project.
Flight to Quality Shifts Risks
By
Roger S. Conrad on
Dec. 10, 2018
It’s “risk off” time again in the US stock market. Stocks of companies considered resistant to US/China trade war pressures and a possible recession are catching bids at their most frenetic pace in two years.
Approaching Dividend Cuts Will Bring Clarity
By
Roger S. Conrad on
Dec. 10, 2018
Dominion Energy (NYSE: D) reached a “definitive merger agreement” to buy out minority unitholders in its Dominion Midstream Partners (NYSE: DM) affiliate.
The final terms reduce the effective distribution cut in the first year of the deal to a bit less than 15 percent. That includes the additional distribution payment of 36.9 cents and Dominion Energy’s expected 10 percent dividend increase in January.
Utility Mergers: The State of Play
Avista Corp (NYSE: AVA) closed December 4 at $52 and change, and opened December 6 in the low-40s. The catalyst: While the US market was closed on December 5, the Washington Utilities Commission concluded months of deliberations by rejecting Canadian utility Hydro One Ltd’s (TSX: H, OTC: HRNNF) all-cash takeover offer.
MODEL PORTFOLIOS & RATINGS
Aggressive Income Portfolio
Roger's favorite utilities for investors seeking superior price appreciation by taking calculated risks.
Conservative Income Portfolio
Harness the tried and true wealth-building power of rising dividends.
Top 10 DRIPs
Nothing compounds wealth like reinvesting a rising stream of dividends.
Endangered Dividends List
Warning: Falling Dividends.
Utility Report Card
Roger's current take and vital statistics on more than 200 essential-services stocks.
Conrad's Utility Investor
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