Feature Article

Although the S&P 500 Utility Index has outperformed every other economic sector in the S&P 500 this year, disciplined investors have ample opportunity to lock in above-average yields on some of our favorites.

By and large, our favorite utilities and other essential-service providers have announced solid first-quarter results, while the market’s low expectations provides a blessing in disguise.

Rising dividends are the essential fuel for higher stock prices. And nothing is more critical for payout growth than healthy, expanding businesses.

America’s leading wireless company grew its earnings per share by 23.5 percent from year-ago levels, expanded its wireless margins to 52.1 percent from 50.4 percent, increased its revenue per customer by 6.3 percent and generated $2.95 billion in free cash flow. 

Not one of the hundreds of regulated utility mergers over the past century has failed to create a stronger, healthier company. Despite skepticism in some quarters, Exelon Corp’s (NYSE: EXC) $6.8 billion purchase of Pepco Holdings (NYSE: POM) is also set for success.

Half a dozen European utilities and telecoms cut dividends in March. The happy count from April: Zero. Several companies this month even graduated from the Endangered Dividends List.

We run through the first quarter’s biggest winners and biggest losers, while revisiting the investment themes that should outperform in 2014.

Soft economic growth and dysfunctional regulation have brought payout cuts for five European power, telecom and water providers. And all but one signal further reductions in the next 12 to 18 months.

The Conrad's Utility Investor Portfolios have beaten benchmark interest rates since I launched on July 31, 2013 - a clear sign my recommended dividend-paying stocks follow earnings, not interest rates. And with another round of earnings due later this month, all of our companies are set to prove their worth to investors again.

America's leading telecom doubles down on its US business with a key acquisition.