Sticking to long-term guidance in face of severe near-term headwinds: That’s the difference maker for investor returns in utilities and essential services stocks this year. And it’s certain to be once again in 2023.
The greatest challenge is the most dramatic increase in interest rates since the 1980s. Debt is an indispensable pillar of financing for capital-intensive sectors like power, communications and water. And even solidly investment grade companies like WEC Energy (NYSE: WEC) have seen their cost of short-term debt increase as much as 350 basis points since the beginning of the year.
There is opportunity. Mainly, investors can lock in yields to maturity of 5 percent on investment grade company bonds and up to 10 percent for selected junk, and without risking capital to rising interest rates.
Invest Smarter! Join Conrad’s Utility Investor!
Smart investing. Taking advantage of real opportunities and not fads (and knowing the difference). Finding the companies and stocks that will deliver for the long haul, so investing lets you live instead of investing turning into your life. Roger Conrad has dedicated his career to these principles—and that’s what Conrad's Utility Investor delivers.
Roger's favorite utilities for investors seeking superior price appreciation by taking calculated risks.
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Warning: Falling Dividends.
Roger's current take and vital statistics on more than 200 essential-services stocks.