Investing Topics: Dividend Stocks

In 2013, the Alerian MLP Index gained 27.6 percent. Energy Transfer Partners (NYSE: ETP) did much better at 43.4 percent, thanks to restoring regular quarterly distribution increases.

Fourth quarter and full-year earnings normally dominate the news this time of year. And rightly so: They’re what ultimately shape shareholder returns.

Verizon Communications (NYSE: VZ) posted solid fourth-quarter earnings yesterday, demonstrating once again why the stock is a foundational holding for income-seeking investors.

Kinder Morgan Energy Partners LP (NYSE: KMP) has come under fire for its tight distribution coverage and concerns that the blue-chip MLP’s size makes it difficult to grow cash flow. The burdensome incentive distribution rights that the partnership pays to its general partner, Kinder Morgan Inc. are another cause for concern.

Nothing destroys shareholder value like a dividend cut. Investors should steer clear of these names.

The Dow Jones Utility Average has lost ground in 17 of the 30 Januarys since 1984. Happily, only 5 of those declines led to a losing year. And in 13 winning Januarys, the average total return was 24.8 percent—the only losing year 1987.

The Conrad’s Utility Investor Portfolios officially launched on July 31, 2013. Since that time, the Dow Jones Utility Average is off -2.3 percent, including dividends paid.

My Aggressive Income Portfolio is up by 9.3 percent, while the Conservative Income Portfolio has returned 3.3 percent.

Investors should disregard any articles about Kinder Morgan Energy Partners’ tanker acquisition that confuse the global VLCC market with US-flagged vessels that comply with the Jones Act.

US electric utilities have enthusiastically embraced renewable energy the past few years. That includes companies that have traditionally relied heavily on fossil fuels and nuclear energy.

Will Santa Claus visit utility stock investors this year? The sector was out of the gate quickly to start the fourth quarter of 2013. But concerns about the “tapering” off of Federal Reserve bond buying quickly slowed things down.