01-15-2015, 03:06 PM
Makes me wonder why a dividend growth investor would touch any utility at the worst possible interest rate environment in a generation. Let interest rates go anywhere close to a normalized level and these stocks will be at half their current value. IMO, where we are now, for a DG investor, means buying companies that have low debt, steady earnings and dividend growth, have multinational exposure, which will do well even when interest rates start to move higher, and finally, will be able to generate inflation beating growth in all but the worst economic slow downs. In a nut shell, the dividend growth investor should mostly seek out dividend paying stocks that are also great total return candidates.
Note: I sold my utilities when yields dropped much below 5%. Actually started selling calls until they eventually got exercised. Won't return to utilities until yields generally rise back above that level. Would consider SO at a dip to under $40, but definitely not before.
Note: I sold my utilities when yields dropped much below 5%. Actually started selling calls until they eventually got exercised. Won't return to utilities until yields generally rise back above that level. Would consider SO at a dip to under $40, but definitely not before.
Alex