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Utilities sector
#71
I'm not saying PCG couldn't be a good buy or you can't make money buying or trading it, I'm simply saying it's not what I consider a high quality dividend growth stock. Therefore it's not going to be on a list I put out to followers looking for DGI stocks.

PCG had problems even before the wildfires, as it had a frozen dividend from 2010-2015. So that says to me it wasn't necessarily a one-off event. It now owns a BB- credit rating and operates in a state that is lawsuit happy and with burdensome taxes and regulations.

That doesn't mean it is without value, it just means it's not something I'm interested in messing around with.
My website: DGI For The DIY
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#72
If I wasn't clear, you absolutely could make a buck trading PCG. Some are already up 50% off the low. 2020 has proven stocks with big issues usually bounce off the bottom. It's my impression that's Eric's list are quality UTEs you could buy and hold for a generally consistently growing dividend, and a decent cap gain if you are even a little bit prudent with your purchase prices. Many on his list do business in regions with reasonable regulatory environments. That really does matter long term. A utility fighting too hard to get fair rate adjustments can languish for years.

Eric, if you get a chance please give ALE a glance as I trust your judgement. Not suggesting you add it to your watch list. It was one of my first buy by mail DRP stocks when it was Minnesota Power and Light. I still keep 100 shares around. I can usually add some income dinking around selling and buying a covered put or call. ALE is way off it's high and trading under historical PE. They have considerable exposure to the iron range BIZ in northern MN. It's about 30% of revenues so they are more cyclical than some UTEs. Currently have a smallish water biz and going greener each year. It's not XEL or DUK for sure, but doesn't seem overly risky on the downside now.
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#73
I've had ALE in my bullpen for several years, but was never impressed enough to move it to the watch list. However, looking again now, it's metrics have improved and it may be worth adding.

Its dividend growth went from 2.9% CAGR over the last 10 years, to 3.7% over the last 5, to 4.7%, 4.9%, and 5.1% for the last three.

Management has guided for 5-7% annual earnings growth, with dividend growth tracking earnings growth and targeting a payout ratio of 60-65%.

The current dividend is 68% of expected 2021 EPS of $3.62, so it may not be too big of an increase coming in January.

However, it looks like 5-6% is possible going forward after that.

Its BBB credit rating is on the low end of my comfort level for a utility, and it doesn't have the track record of a few others on the list, but with a yield over 4% and its growth expectations, it looks like a decent stock to own.
My website: DGI For The DIY
Also on: Facebook - Twitter - Seeking Alpha
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#74
Thanks for the feedback. It's never really met my threshold for a core holding. They have always had a bit too much exposure to the iron range/taconite biz. I wondered if they might be acquired some day but that never happened. Steel booms have been few and far between. Stock doesn't stay down long on a dip so I'll do my thing and wait for it to pop eventually. I suspect their migration towards renewables might fuel it whether it should or not. XEL crushed it the past 25 years and probably always will.
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#75
(12-25-2020, 05:09 PM)EricL Wrote: I'm not saying PCG couldn't be a good buy or you can't make money buying or trading it, I'm simply saying it's not what I consider a high quality dividend growth stock. Therefore it's not going to be on a list I put out to followers looking for DGI stocks.

PCG had problems even before the wildfires, as it had a frozen dividend from 2010-2015. So that says to me it wasn't necessarily a one-off event. It now owns a BB- credit rating and operates in a state that is lawsuit happy and with burdensome taxes and regulations.

That doesn't mean it is without value, it just means it's not something I'm interested in messing around with.
Both of you shared similar thoughts and that makes sense. Thank you. Appriciate it. I do have a small position in PCG now. In the past I have had better returns in SO and DUK. That's said PCGU(convertible, pays ~4-5%) is the only utility I hold right now and probably won't add a lot more than I hold. ( unless We count T as utility too).
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#76
(12-27-2020, 08:54 PM)vbin Wrote:
(12-25-2020, 05:09 PM)EricL Wrote: I'm not saying PCG couldn't be a good buy or you can't make money buying or trading it, I'm simply saying it's not what I consider a high quality dividend growth stock. Therefore it's not going to be on a list I put out to followers looking for DGI stocks.

PCG had problems even before the wildfires, as it had a frozen dividend from 2010-2015. So that says to me it wasn't necessarily a one-off event. It now owns a BB- credit rating and operates in a state that is lawsuit happy and with burdensome taxes and regulations.

That doesn't mean it is without value, it just means it's not something I'm interested in messing around with.
Both of you shared similar thoughts and that makes sense. Thank you. Appriciate it. I do have a small position in PCG now. In the past I have had better returns in SO and DUK. That's said PCGU(convertible, pays ~4-5%) is the only utility I hold right now and probably won't add a lot more than I hold.  ( unless We count T as utility too).
T is another subject.  There was a day it may have been a utility sub prior to the sketchy acquisitions.  To me it is now a high yield bond substitute.  Prepare to lose enough capital to wipe out the entire dividend any given year. That's why I play option sale games with it.  Get the annual income over 12% and I can withstand some SP drop risk.
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