11-25-2018, 11:29 AM
I've always loved utilities. They've outperformed the rest of my port perhaps one out of three years going back over 25 years. It's rare when they dip much over 10% off their 52 week high. As I've mentioned before I caught XEL after an execution error and rode it for 500%. But that isn't a realistic expectation going forward. To me they are nearly as safe as cash if you have a minimum three year time horizon and a diversified mix of UTES. I intend to make them a much larger part of my port as I approach retirement.
The true intent of this thread is to encourage others to share their favorite utilities, why they like them, and if they recommend them at current prices. I will certainly research them.
Generally speaking, I look for the following in a utility I am about to enter....
-Minimum 3% current yield, with a history of dividend increases. I'll consider a high div from a UTE in peril if the forward story sounds reasonable.
-A reasonable likelihood of increased revenue growth for the foreseeable future. If revenue growth is flat the current yield better compensate for it now. It's mandatory for me.
-Fast growth rate UTEs with a very low dividend may be shunned in a rising interest rate environment so I have always avoided them. I feel like they may be treated like a normal stock in a tough market when it's too easy to get 3% yield with zero risk. I could be wrong.
-I prefer UTEs with the wisdom to think to the future. More Natty gas, less coal, invest in wind and solar as it is part of the future. It's expensive to convert so best to start now. XEL is a good example of doing it right IMO.
-I like to spread my UTES around the country. Hurricanes, forest fires and unseasonably warm winters happen. These all effect the BIZ outlook when it happens.
-I don't like high PE UTEs but I may have to get over that or I'll possibly sit on the sidelines forever.
-I am currently considering or attempting to build larger positions in AEP, XEL, D, SO , ED
Your recommendations are much appreciated.
The true intent of this thread is to encourage others to share their favorite utilities, why they like them, and if they recommend them at current prices. I will certainly research them.
Generally speaking, I look for the following in a utility I am about to enter....
-Minimum 3% current yield, with a history of dividend increases. I'll consider a high div from a UTE in peril if the forward story sounds reasonable.
-A reasonable likelihood of increased revenue growth for the foreseeable future. If revenue growth is flat the current yield better compensate for it now. It's mandatory for me.
-Fast growth rate UTEs with a very low dividend may be shunned in a rising interest rate environment so I have always avoided them. I feel like they may be treated like a normal stock in a tough market when it's too easy to get 3% yield with zero risk. I could be wrong.
-I prefer UTEs with the wisdom to think to the future. More Natty gas, less coal, invest in wind and solar as it is part of the future. It's expensive to convert so best to start now. XEL is a good example of doing it right IMO.
-I like to spread my UTES around the country. Hurricanes, forest fires and unseasonably warm winters happen. These all effect the BIZ outlook when it happens.
-I don't like high PE UTEs but I may have to get over that or I'll possibly sit on the sidelines forever.
-I am currently considering or attempting to build larger positions in AEP, XEL, D, SO , ED
Your recommendations are much appreciated.