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Investing Topics: Value Investing

Canada: Dividend Wonderland

By Roger S. Conrad on Sep. 21, 2014
From REITs to former income trusts, Canada is still a dividend wonderland for income-seeking investors.

US Utilities Walk Both Sides of the Street

By Roger S. Conrad on Sep. 13, 2014
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.

Canadian REITs: Unloved Unreasonably

By Roger S. Conrad on Sep. 8, 2014
Canadian REITs trade at reasonable valuations, offer superior yields and generally operate more conservatively than their US peers.

Five Big Deals to Build Wealth

By Roger S. Conrad on Sep. 4, 2014
Five of our Portfolio holdings have closed or announced deals that figure to be big-time profit boosters.

Cutting Risk to Lock in Growth

By Roger S. Conrad on Jul. 9, 2014

Since the beginning of May, 80 percent of the companies in our model Portfolios have hit 52-week highs. And the rest are a good day’s trading from this achievement. Our Aggressive Income Portfolio has delivered an average return of 27.5 percent since its inception, roughly doubling the 13.7 percent gain posted by the Dow Jones Utilities Average over equivalent holding periods. Meanwhile, the picks in our Conservative Income Portfolio have generated an average return of 13.4 percent, slightly lagging the benchmark index’s 14 percent gain.

But new risks have emerged that bear monitoring. A growing focus on allowance for funds used during construction (AFDUC) has identified some utilities that may be at risk of potential write-downs. Meanwhile, others find themselves in the crosshairs of the Obama administration’s aggressive environmental policies.

The greatest danger to most of the 207 stocks in my Utility Report Card comes when investors’ expectations rise along with prices. That’s why it’s critical to stick with my buy targets, which are based on long-run value—not near-term momentum.

Be patient when a stock you want to buy moves above my buy target. I will raise those targets when potential returns rise and risks diminish. Until then, focus your firepower on the stocks highlighted in this issue.

A Rare Value in the Utility Sector

By Roger S. Conrad on Jul. 9, 2014

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.

Stock Offerings: Time to Buy

By Roger S. Conrad on Jun. 16, 2014

A growing, capital-intensive business must regularly be fed with sales of debt and equity. Investors almost invariably fear such offerings as either dilutive or incurring more debt. But the lowest corporate borrowing rates in a generation have enabled companies to cut interest expenses with new debt offerings, eliminating their near-term exposure to rising rates. This week, we look at six Conrad's Utility Investor Portfolio holdings that have had recent offerings.

Finding Value in a Higher-Priced Market

By Roger S. Conrad on Jun. 6, 2014

Our Portfolios are a mixed bag in terms of their underlying businesses and growth drivers. But our holdings are on track for solid earnings and dividend growth over the long haul. These names don’t respond uniformly to changing business conditions or short-term market moves so diversification is key to reduce volatility.

Secrets to Successful Income Investing

By Roger S. Conrad on Jun. 1, 2014

Dividend-paying stocks aren’t bond substitutes and never will be. Any investor who has sold these equities because of rising interest rates has lost big over the past 22 years. Those who do so now are playing with the same fire and, inevitably, will be badly burned.

MODEL PORTFOLIOS & RATINGS

ABOUT ROGER CONRAD

Roger S. Conrad needs no introduction to individual and professional investors, many of whom have profited from his decades of experience uncovering the best dividend-paying stocks for accumulating sustainable wealth. Roger b