| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 10.6% | -2.4% | 14.2% |
| 2025 |
|---|
| 14.2% |
Miller Howard's Utilities Plus strategy delivered 15.08% gross returns in 2025, nearly matching the S&P 500 Utilities Index despite a challenging fourth quarter. The portfolio benefited from structural demand growth driven by data center proliferation, manufacturing reshoring, and ongoing electrification trends. Utilities are deploying accelerating capital into grid infrastructure, with S&P 500 utility capex forecasts increasing 16% and 15% for 2026-2027. This capital deployment within regulated frameworks is lifting growth profiles, with earnings estimates revised higher by 1.1-4.9% across 2026-2028. The enhanced earnings profile pushes projected three-year compound annual growth to over 10%, up from 8% previously. Portfolio positioning was actively managed, trimming Public Service Enterprise Group due to New Jersey regulatory pressures while adding to NextEra Energy and Sempra Energy after underperformance created attractive entry points. Ten holdings announced dividend increases averaging 15.3%, reinforcing the strategy's focus on high and rising income generation alongside capital appreciation.
Utilities are positioned to benefit from accelerating electricity demand growth driven by data centers, manufacturing reshoring, and electrification, with enhanced earnings profiles supporting higher dividend growth and total returns.
US electricity demand continues to grow driven by data center proliferation, manufacturing reshoring, and electrification trends. An enhanced earnings profile should strengthen utilities' ability to provide high and rising income to investors.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 24 2026 | 2025 Q4 | AEP, BKH, CEG, DTE, MDU, NEE, PEG, PPL, SO, SRE, VST, XEL | Capital Expenditure, Data centers, dividends, earnings growth, Grid Infrastructure, nuclear, Power Markets, Utilities | - | US electricity demand continues to grow driven by data center proliferation. Utilities are deploying accelerating capital into grid infrastructure to bridge the gap between existing… |
| Oct 19 2025 | 2025 Q3 | AEP, ATO, ETR, FTS CN, MDU, NRG, PEG, PPL, SRE, VST, XEL | Data centers, dividends, Electrification, Transmission, Utilities | - | Utilities benefited from electrification trends and surging data center power demand driven by AI infrastructure growth. Regulatory clarity and transmission investment are major growth catalysts,… |
| Jul 22 2025 | 2025 Q2 | AEP, CEG, CMS, EXC, PCG, PEG, PPL, SRE, VST | Data centers, dividends, electricity demand, infrastructure, Utilities | - | The letter highlights regulated utilities and independent power producers as beneficiaries of surging electricity demand from AI, data centers, and electrification trends. Management stresses that… |
| Mar 31 2025 | 2025 Q1 | AEP, CNP, EIX, ETR, EXC, PCG, SO, VST, XEL | - | - | - |
| Dec 31 2024 | 2024 Q4 | PCG, VST | - | - | - |
| Sep 30 2024 | 2024 Q3 | AWK, CEG, DUK, MSFT | - | - | - |
| Jun 30 2024 | 2024 Q2 | AWK, VST | - | - | - |
| Mar 31 2024 | 2024 Q1 | - | - | - | - |
| Dec 31 2024 | 2023 Q4 | ETR, PEG, POR | - | - | - |
| Sep 30 2024 | 2023 Q3 | NEE, SO, VST | - | - | - |
| Jun 30 2024 | 2023 Q2 | D, MDU, NGG, UGI, VST | - | - | - |
| Mar 30 2024 | 2023 Q1 | NRG, POR, PPL, SO | - | - | - |
| Feb 22 2023 | 2022 Q4 | - | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
Data CentersComfort Systems USA benefited from robust demand for data centers and AI-related infrastructure, with the company reporting stronger-than-expected revenue driven by this demand. |
Infrastructure Technology Construction AI Revenue |
DividendsDividend-paying companies lagged non-dividend-paying companies by more than 50%. On average, portfolio holdings raised their dividends 9% over 2025, in line with their earnings growth. The top three dividend raisers were Amphenol (55%), Cintas (15%), and Verisk Analytics (15%). |
Dividend Growth Income Yield Distribution Payout | |
Grid UpgradeUtilities are deploying ever-accelerating amounts of capital into grid infrastructure to meet rising electricity demand. S&P 500 Utility Index capex forecasts for 2026 and 2027 increased by 16% and 15% respectively. Higher levels of capital deployed within the regulated utility framework are lifting utility growth profiles. |
Grid Infrastructure Capital Expenditure Regulated Utilities Transmission Power Grid | |
Independent Power ProducersTightening power markets for independent power producers lifted utility growth profiles. Constellation Energy benefited from FERC ruling on co-location viewed as positive for IPP development. The company also benefited from PJM Interconnection capacity auction where pricing came in at the top of the collar range. |
Independent Power Producers Power Markets Capacity Markets FERC PJM | |
NuclearPosition in Uranium Energy as the largest licensed uranium miner in the U.S., positioned to benefit from renewed focus on nuclear power as long-term energy solution and U.S. efforts to strengthen domestic nuclear fuel supply chains for national security. |
Uranium Mining Nuclear Power Energy Security Domestic Supply National Security | |
| 2025 Q3 |
Data CentersComfort Systems USA benefited from robust demand for data centers and AI-related infrastructure, with the company reporting stronger-than-expected revenue driven by this demand. |
Infrastructure Technology Construction AI Revenue |
Electrification |
||
UtilitiesThe utilities sector led returns in Q4 2025, with SSE delivering strong performance supported by its upgraded investment plan and improved visibility across regulated earnings and renewable infrastructure growth. The portfolio maintains an 8.9% allocation to utilities, representing a +5.3% overweight versus the benchmark. |
Regulated Utilities Renewable Infrastructure Investment Plan Earnings Visibility Infrastructure | |
| 2025 Q2 |
UtilitiesThe utilities sector led returns in Q4 2025, with SSE delivering strong performance supported by its upgraded investment plan and improved visibility across regulated earnings and renewable infrastructure growth. The portfolio maintains an 8.9% allocation to utilities, representing a +5.3% overweight versus the benchmark. |
Regulated Utilities Renewable Infrastructure Investment Plan Earnings Visibility Infrastructure |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| No Elevator Pitches found | ||||||||||
| TICKER | COMMENTARY |
|---|---|
| AEP | 3Q earnings were in line. AEP raised its annual EPS guidance to 9% through 2030, supported by an increased capital plan driven by 28 GW of incremental load from data centers and large-load customers. |
| BKH | 3Q earnings exceeded expectations. BKH increased its data center pipeline guidance from 1 GW to 3 GW+, which is expected to be a long-term driver of EPS growth. |
| CEG | 3Q results were in line, and the company noted commercial activity was intensifying. A FERC ruling on co-location was viewed as a positive for Independent Power Producer (IPP) development. CEG also benefited from the PJM Interconnection capacity auction in which pricing came in at the top of the collar range. |
| DTE | 3Q earnings beat, but 2026 guidance was below expectations. DTE now embeds slightly higher equity issuance and lower FFO/debt (funds from operations) in its plan. |
| MDU | 3Q earnings were in-line, and the low end of FY25 guidance was raised. There is continued discussion of the $1bn+ FERC-regulated Bakken East pipeline, which is expected to begin binding open season in 1Q2026 and is anticipated to be a significant driver of EPS growth. |
| NEE | We added to positions in NextEra Energy (NEE) and Sempra Energy (SRE) after periods of underperformance provided attractive buying opportunities for two companies that we expect will benefit from their premium growth profiles. 3Q earnings beat with 2025 earnings tracking toward the high end of guidance. NEE signed a 25-year power purchase agreement with GOOG (not held) to restart the Duane Arnold nuclear plant. Subsidiary FPL had a constructive 4-year rate settlement. NEE continues to benefit from its ability to serve data centers with a diversified offering. |
| PEG | We trimmed our position in Public Service Enterprise Group (PEG) on a deteriorating regulatory environment as focus has shifted to bill pressure in New Jersey. |
| PPL | PPL reaffirmed its 6% to 8% EPS growth guidance. PPL is in its first rate case in PA since 2016. |
| SO | 3Q earnings exceeded expectations, and management guided to the top end of FY25 guidance. SO shares sold off on news that two Democrats defeated incumbent Republicans for seats on the Georgia Public Service Commission. |
| SRE | We added to positions in NextEra Energy (NEE) and Sempra Energy (SRE) after periods of underperformance provided attractive buying opportunities for two companies that we expect will benefit from their premium growth profiles. |
| VST | New position in merchant power producer Vistra. |
| XEL | XEL updated its long-term EPS guidance to 6% to 8%+ (with management expecting to be able to deliver 9%). However, the Texas attorney general (AG) announced that he is suing the company for its involvement in the Smokehouse Creek fire. We would note that the AG is currently running for a US Senate seat. |
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