Four Trends to Bet On

Big picture themes always grab investing headlines. Success, however, flows from knowing what’s up with individual companies.

Regulated water utilities, for example, are on their face the very simplest and uniform of businesses. Yet so far in 2013, returns from the 10 companies I track in the Utility Report Card have ranged from a 26 percent gain to barely breaking even.

The contrast in the Dow Utility Average has been even greater. Over the past five years, index member NiSource (NYSE: NI) is up over 129 percent, while Exelon (NYSE: EXC) has lost more than 60 percent of its value. And the 48 US and foreign telecoms I cover have done everything from double investors’ money to nearly wipe out their equity.

Essential service companies’ revenues, earnings and dividends are exceptionally steady, mainly because what they provide is always in demand. But as these returns show, no matter what the environment, some companies will grow while others flounder. It’s always a bull market for the best, and a bear for the worst.