Four Favorite Utilities from Dow Theory Forecasts

favorite utilities sales utility moroney
Gulf
  • Date: 07/22/2021
  • Source: Yahoo News
  • Sector: Oil & Gas
  • Country: Gulf

Four Favorite Utilities from Dow Theory Forecasts

July 21, 2021, 3:00 AM·5 min readUtilities appeal to investors as a source of diversification and a steady stream of dividend payments, observes Richard Moroney, growth and income expert and editor of Dow Theory Forecasts.Also encouraging, the U.S. Energy Information Administration expects retail sales of electricity to climb 2.3% in 2021 and 1.4% in 2022 after falling 3.9% last year, a development that bodes well for the sector’s sales and profit growth. In the following paragraphs, we review our favorite utility stocks from four different industries:Among diversified utilties, MDU Resources (MDU) complements its traditional natural gas (15% of sales for the 12 months ended March) and electric (6%) utilities with a pipeline business (2%) and construction-materials (39%) and construction-services (37%) operations.More from Richard Moroney: Top Picks Mid-Year Updates: Applied MaterialsThe shares have retreated 10% in the past month, perhaps hurt by limited progress made on a U.S. infrastructure bill, but remain up 17% in 2021. The pullback has lowered MDU’s trailing P/E to 15, a 22% discount to the average utility stock.MDU aims to invest $1.6 billion over five years into its utility business, intended to grow its rate base 5% annually over that stretch. Regulators use the rate base to calculate a