Investing Topics: Utility Stocks

Oil's dramatic retrenchment serves as a useful reminder of why investors should diversify their portfolios.

We highlight the best buying opportunities in today’s market, including several names that trade at an unwarranted discount because of the severe downdraft in crude-oil prices.

Washington brought plenty of sturm and drang last week, but it's still all about the earnings.

By the end of 2016, energy companies will lock in the lion’s share of an estimated $600 billion in contracts for new infrastructure to process and transport surging US oil and gas production to market.   This construction boom creates an unprecedented opportunity for well positioned energy companies such as Dominion Resources (NYSE: D), which recently proposed a 550-mile pipeline to carry cheap shale gas to energy-hungry North Carolina and Virginia. (See Five Big Deals to Build Wealth.)   The pipeline project has stoked the usual opposition from environmentalists and concerned citizens who, by reflect, don’t want any energy-related infrastructure in their backyards.   Ironically, utilities have answered environmentalists’ call for more renewable energy, increasing wind generation from 6 billion to 168 billion kilowatt-hours between 2000 and 2013 and solar-power capacity by 70 percent since 2013. That’s a clear demonstration of how the best US utilities have walked both sides of the street in the debate over fossil fuels and renewable energy. As long as these companies earn a fair return on investment, they’ll continue to reward us with rising earnings and dividends.

Perhaps those dastardly short sellers aren’t so smart after all.

The Alerian MLP Index hits a new high, the DJUA recovers and many of our value names have soared. This summer's volatility shows why it pays to wait for the right price to buy.

Fear-mongering pundits often point to Germany's energy policy to illustrate the risk that the boom in renewable-energy development poses to the US. Australia provides a better analogue for the US experience, though investors should understand the American energy landscape's unique features before placing their bets.

The seller's market for bonds favors dividend-paying equities, but investors need to remain disciplined and avoid overpaying for quality.

Our Portfolio holdings continue to post solid quarterly results. Even better, the market’s recent pullback gives us an opportunity to buy our favorites at appealing prices.

Don’t panic! The long-awaited correction has finally arrived, giving patient investors an opportunity to pick up high-quality utility stocks at reasonable valuations.