Investing Topics: Electric Utilities

We check in on 14 more of our Portfolio holdings that have reported quarterly earnings, and the big news on our recent WIN.

Three US electric utilities are now investing in LNG exports through new acquisitions. However one of these is uniquely positioned to bring new LNG export capacity on line and open North American gas to the world.

Rarely will you find a sector’s top-quality stocks on sale more than five years into a bull market. But that’s the case with this new Conservative Income Portfolio holding. Record demand has enabled this utility to grow its first-quarter earnings by 19.7 percent year over year.

Thanks to the rapid development of renewable energy and the support of state regulators, this utility has moved to break its addiction to imported oil, setting the stage for higher profits over the long term and lower bills for consumers.

With valuations elevated in the utility sector, investors should pay close attention to the risks and opportunities created by four key themes.

The Environmental Protection Agency's (EPA) proposed rules on carbon dioxide (CO2) emissions create dange and opportunities for investors in utility stocks.

Wisconsin Energy's $8.93 billion acquisition of Itegrys Energy marks the latest mega-deal in the energy patch. We scrutinize the merger and explain why this won't be the last big transaction in the utility sector. 

Our best power play in Asia owns and operates high-quality electric power assets in Southern China and India--two markets with the best prospects for demand growth--and its empire is poised to keep overall earnings and dividends growing.

Although the S&P 500 Utility Index has outperformed every other economic sector in the S&P 500 this year, disciplined investors have ample opportunity to lock in above-average yields on some of our favorites.

Exelon Corp’s (NYSE: EXC) $6.9 billion all-cash takeover offer for Pepco Holdings (NYSE: POM) has gotten a mixed reception from investors, but the deal pushes the acquirer closer to resuming dividend growth.