Portfolio Article

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

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.

Conrad's Utility Investor has three actively managed portfolios--Aggressive Income, Conservative Income and Top 10 Drips--each of which is tailored to a specific investment style and risk tolerance. We review each model portfolio's objective, book a 60 percent gain on one of our winners and shift one of our Conservative Income Portfolio holdings to the Aggressive Income Portfolio.

Buying stocks of strong companies at the lowest possible prices: That’s been my primary strategy thus far for the Conrad’s Utility Investor Portfolios.

This month, I’m adding two stocks to the Conservative Holdings.

Seek stocks of healthy and growing companies whose prospects exceed investor expectations. Then build a diversified and balanced mix you can hold long-term, to enjoy the rising cash flow and share price appreciation that growing dividends provide over time.

Healthy growing businesses produce rising dividends, which in turn push share prices higher: That’s the utility investor’s road to superior and safe long-term returns. And if operating results of our Portfolio companies are any indication, it’s still wide open.

Fourth quarter is usually a good time to hold utility stocks. But it’s only rarely a good time to buy, as prices often reach yearly highs.

Thus far, my strategy has been to populate the three Conrad’s Utility Investor Portfolios as quickly as I can with high-quality fare, without paying too much.

Investors are dumping dividend-paying stocks of strong companies due to misplaced fears about interest rate sensitivity. That’s opening up new opportunities in our favorite stocks, but be patient with prices.

Discipline, consistency and hard work don’t always guarantee success. But they're the necessary foundation of every winning investment strategy.