Investing Topics: DRIP Investing

Taper talk is heating up again as Federal Reserve Chairman-in-waiting Janet Yellen’s fate is debated on Capitol Hill. Rate hike speculation, however, is having much less impact on essential services stocks than it did this past spring. And one big reason is strong third quarter results.

Only three of the 28 current Conrad’s Utility Investor Portfolio recommendations have yet to report calendar third quarter earnings. That’s plenty of data to identify relevant sector trends, while we assess the health of individual companies.

Since the November issue of Conrad’s Utility Investor went to post, five more portfolio companies have reported calendar third quarter 2013 results. Here are the highlights.

AT&T Inc (NYSE: T) was the only Conrad’s Utility Investor Portfolio pick to report numbers last week. Takeaway one is quite positive: The results followed closely those of arch-rival and co-Big Two US communications company Verizon Communications (NYSE: VZ).

Utilities and other providers of essential services are proven survivors of even the worst market debacles. As the 2008 market crash showed, the sector takes hits with the rest of the stock market.

In the October issue, I added four stocks to the Conrad’s Utility Investor model portfolios.

Distribution growth shapes returns for master limited partnerships (MLPs).

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.

Who says the bond market is washed out? Certainly not Verizon Communications (NYSE: VZ).

The company’s record $49 billion bond sale has not only locked in financing for its $130 billion buyout of Vodafone Plc’s (London: VOD, NYSE: VOD) minority stake in Verizon Wireless. But it was actually doubled, eliminating the need to raise funds in Europe.

Dominion Resources (NYSE: D) shares hit an all-time high this week. The catalyst: A proposed spin off of the company’s natural gas assets into a master limited partnership (MLP), with an initial public offering in the second quarter of 2014.