From June 2004 to June 2006, the US Federal Reserve raised the benchmark interest rate by 425 basis points to 5.25 percent. Over this period, the Dow Jones Utilities Average generated a total return of more than 61 percent.
Utility stocks stumbled a bit in the early part of 2004, when speculation swirled that the Fed would raise interest rates. But once the central bank made its move, these stocks recovered swiftly.
Bottom Line: During the Fed’s most recent tightening cycle, the Dow Jones Utilities Average posted its second-best two-year return since World War II.
Market history is one reason we’re not concerned that rising interest rates will sap our favorite dividend-paying utilities.
And the prospect of elevated volatility in the near term creates opportunities, enabling us to add high-quality names to our model Portfolios at favorable entry points.
Meanwhile, a combination of attractive valuations, low costs of capital and the never-ending quest for scale has fueled a wave of utility mergers and generated windfall profits for lucky shareholders.
This month’s feature article highlights three strategies for investors to profit from the upsurge in mergers and acquisitions in the utility and telecom sectors.
We briefly recap our key takeaways from earnings season and review results from the final three of our Portfolio holdings to report results.
Second-quarter earnings season is in full swing. Here's how our Portfolio holdings have fared.
Reports that Teco Energy has put itself up for sale have sparked speculation about the next takeover targets in the utility sector. We highlight five of our favorites.
Here are some of the key themes on our radar as second-quarter earnings season approaches.
Investor sentiment toward yieldcos has soured considerably since midyear. Here's why.
Investors should take advantage of market volatility and fears of rising interest rates to establish or add to positions in high-quality utility stocks.
For much of the year, we've warned that deteriorating technical indicators had elevated the risk of a correction in the S&P 500. Here's our updated outlook following today's market action.
Earlier this month, the US Environmental Protection Agency issued final rules designed to limit carbon dioxide emissions from power plants. We run through the winners and losers from this new policy.
In April 2013, I left my job of 25 years as founding editor of Utility Forecaster to form my own publishing company and write the investment newsletter of my dreams: Conrad’s Utility Investor. The publication’s second birthday is as good a time as any to review where utility stocks have been and my outlook for where they’re headed.
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.