Roughly 10 percent of Utility Report Card companies have yet to report Q2 results and update guidance. That’s more than enough of a sample to draw one very powerful conclusion:
In the worst economy in 90 years, the utilities and essential services business model has proven its resilience.
Last quarter, US GDP contracted 9.5 percent and most of the world did much worse. But most coverage universe companies posted stable earnings that supported dividends and strong balance sheets. And they kept long-term growth strategies on track.
There are some notable exceptions, mostly in the usual places. The further companies strayed from core regulated and contracted revenue streams, the more likely they got burned this year. Ditto those relying heavily on debt leverage the past few years.
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Warning: Falling Dividends.
Roger's current take and vital statistics on more than 200 essential-services stocks.