Feature Article
NTT: Tomorrow’s Telecom for a 20th Century Price
By
Roger S. Conrad on
Feb. 11, 2019
When the Japanese government called for a big cut in wireless rates last year, NTT DoCoMo (Tokyo: 9437, OTC: DCMYY) was first to respond. Investors immediately assumed the worst, selling off its shares as well as those of its parent and 56.52 percent owner Nippon Telegraph & Telephone (Tokyo: 9432, OTC: NTTYY).
Another Chance to Buy Telecom’s Best
By
Roger S. Conrad on
Feb. 11, 2019
Last week, Verizon Communications (NYSE: VZ) sold $1 billion in 10-year green bonds at a cost that was 14 percent lower than expected. That’s just the latest demonstration of this company’s superior access to capital, even as it generates $18 billion in free cash flow this year, or twice its total dividends.
Following the Numbers
By
Roger S. Conrad on
Feb. 11, 2019
For income investors, only two things matter when it comes to returns: Are the companies we own solid on the inside and can they grow their dividends sustainably? Reliably rising dividends keep your income ahead of inflation. Stock prices always follow a rising dividend higher, just as dividend cuts always send them lower.
No New Cuts, Some New Risks
By
Roger S. Conrad on
Feb. 11, 2019
Dominion Midstream has merged into its general partner Dominion Energy (NYSE: D). Unitholders by now should have received 0.2492 shares of D per DM unit. Factoring in Dominion Energy’s 10 percent dividend increase and a final partnership distribution of 36.9 cents per unit paid last month, Midstream unitholders will receive approximately -6.5 percent less in 2019 distributions than they did in 2018.
Another Crack At High Yield Hunting
By
Roger S. Conrad on
Feb. 11, 2019
Calendar year 2018 was a tough time for high yield seekers.
Interest rates and Federal Reserve policy were hardly the problem. Though quite volatile, the benchmark 10-year Treasury note yield nonetheless finished about where it started. And as for the Fed, what was already the slowest monetary tightening cycle in history has basically stalled out.
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.
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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