We still have a few weeks left in 2020. But whatever happens, this will go down as one of the most eventful years in stock market history. There’s certainly plenty to recap already. The rapid swing from historic profit-taking opportunity in mid-February to equally compelling Dream Buy barely a month later is certainly without precedent in my career.
If you’re underwhelmed so far by the next generation of wireless communications—dubbed 5G—you’re far from alone. By any measure, this has been a year of exploding demand for fast and reliable connectivity with work, schooling and entertainment shifting to residences. Not one US communications company, however, has meaningfully broken down 5G adoption for investors, a fact reinforced by generally flat Q3 wireless revenue growth.
Back in January, I added unregulated electricity generator and retailer Vistra Energy (NYSE: VST) to the Aggressive Holdings for three reasons.
First, the company is a cash machine, consistently shaving costs from its business and debt from its balance sheet while gaining market share with acquisitions and “greening” its generation fleet. Second, its shares traded at a major valuation gap I thought would close as the US economy strengthened. And third, there was a growing possibility of a takeover, potentially by private capital.
Conservative Holding Avangrid Inc (NYSE: AGR) hasn’t raised its dividend since July 2018. Not surprisingly, its returns have since lagged the Dow Jones Utility Average by more than 25 percentage points.
Two major developments in the past month promise a favorable reversal of fortune, even as shares have dropped roughly 10 percent to an attractive entry point.
Economics not politics drive investment returns. Don’t get me wrong. Our Portfolio stocks came out very well in the recent election as businesses, future regulatory relations being the key concern.
The renewable energy focus of our electricity stocks is tailor-made for a new White House that will if anything try to speed up America’s ongoing energy transition. And the offshore wind stocks highlighted in the feature article are likely to be the next sector picks to pop, following example of contract generators like Brookfield Renewable Energy Partners (TSX: BEP-U, NYSE: BEP).
Energy Transfer LP (NYSE: ET) and Infraestructura Energetica (Mexico: IENOVA, OTC: IENVF) are the 25th and 26th dividend cutters from our Utility Report Card coverage universe in calendar 2020.
The silver lining is management’s decisions were clearly made for preference, rather than of necessity. That’s encouraging for both companies as well as others we track, with the result our Endangered Dividends List is the shortest it’s been all year.
Elections have consequences. And when businesses are as tightly regulated as utilities, investors must always keep a clear, non-partisan eye on the implications of results.
Contrary to popular belief, the most important election results to watch are always at the state level. And this year featured nearly 6,000 individual legislative races in 44 states, as well as governors’ races in 11.
Roger's favorite utilities for investors seeking superior price appreciation by taking calculated risks.
Harness the tried and true wealth-building power of rising dividends.
Nothing compounds wealth like reinvesting a rising stream of dividends.
Warning: Falling Dividends.
Roger's current take and vital statistics on more than 200 essential-services stocks.