| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
Miller Howard's Utilities Plus portfolio posted modestly positive performance in Q2 2026, outperforming its negative benchmark despite headwinds from rising interest rates and a rotation away from defensive sectors early in the quarter. The 10-year Treasury yield reached 4.66% in mid-May before declining in June, when utilities recovered ground supported by falling yields and continued data center power demand interest. Small- and mid-cap regulated utilities outperformed as investors rotated toward risk, while independent power producers lagged amid limited incremental data center deals and regulatory uncertainty. The portfolio added to Xcel Energy based on attractive valuation and premium growth profile. Key developments included NextEra's planned acquisition of Dominion Energy in what would be the sector's largest-ever merger, and multiple holdings raising capex guidance. The manager remains constructive on the sector's structural tailwinds, highlighting that aggregate capex guidance for S&P 500 regulated utilities increased 83% from $145B in 2022 to $265B in 2026, with year-over-year growth accelerating from 8% to 23%. This expanding capex is expected to drive earnings growth and support high, growing dividends despite near-term regulatory and rate headwinds.
Regulated utilities are positioned to deliver high and growing income supported by an accelerating capex growth trajectory driven by structural demand tailwinds from data centers, electrification, and grid modernization, with aggregate capex guidance increasing 83% from 2022 to 2026 and year-over-year growth accelerating to 23% in 2026.
The manager maintains a constructive view on the utility sector driven by structural tailwinds including data center load growth, electrification, manufacturing reshoring, and grid modernization. The accelerating pace of capex growth—with aggregate guidance increasing 83% from 2022 to 2026 and year-over-year growth accelerating to 23%—is expected to drive a steepening earnings growth trajectory. While regulatory oversight and bill pressure dynamics require monitoring, the manager believes utilities' expanding capex plans will support their ability to deliver high and growing income for investors. The tone is cautiously optimistic, acknowledging near-term headwinds from rates and regulation while emphasizing long-term structural growth drivers.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jul 25 2026 | 2026 Q2 | AEP, ATO, CEG, D, ETR, EXC, LNT, NEE, PPL, SRE, VST, XEL | Capex, Data centers, dividends, Electrification, M&A, rates, Regulated Utilities | - | Utilities Plus outperformed in Q2 2026 despite rate headwinds, benefiting from small/mid-cap regulated utility strength and data center power demand. The portfolio added to Xcel Energy on valuation. Regulated utility capex guidance surged 83% since 2022 to $265B, with growth accelerating to 23% year-over-year, driven by data centers, electrification, and grid modernization—positioning the sector for steepening earnings growth and rising dividends. |
| Apr 28 2026 | 2026 Q1 | JPM, XOM | AI, disruption, dividends, growth, HALO, infrastructure, Utilities, valuation | - | AI disruption threatens growth stocks with premium valuations as agentic AI erodes competitive advantages. Miller/Howard advocates dividend investing as superior hedge, emphasizing mathematical incompatibility between high yields and high P/E ratios. Firm maintains focus on HALO companies with physical assets while providing disciplined dividend income strategy amid market uncertainty. |
| 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 | - | Utilities delivered strong 2025 performance despite Q4 headwinds, benefiting from accelerating electricity demand driven by data centers and electrification. Enhanced earnings growth profiles support higher dividend yields and total returns. Portfolio actively repositioned toward premium growth companies while maintaining focus on regulated utility frameworks that provide predictable cash flows and rising income streams. |
| Oct 19 2025 | 2025 Q3 | ATO, AWK, CNP, ETR, FTS, MDU, NI, NRG, PEG, PPL, SRE, VST, XEL | AI, Data centers, dividends, Electrification, energy, infrastructure, Transmission, Utilities | - | Utilities Plus capitalized on AI-driven electricity demand and transmission infrastructure opportunities in Q3. The portfolio benefits from structural trends including data center growth and electrification, with the DOE calling for doubling transmission capacity by 2050. Strong dividend growth and regulated capital deployment opportunities position utilities to deliver rising income while supporting digital economy expansion. |
| Jul 22 2025 | 2025 Q2 | ATO, AWK, CNP, ETR, FTS, MDU, NI, NRG, PEG, PPL, SRE, VST, XEL | Data centers, dividends, energy, infrastructure, Transmission, Utilities | - | Utilities delivered strong Q3 performance driven by AI enthusiasm and data center power demand. The need to double transmission capacity by 2050 creates significant regulated capital deployment opportunities. Portfolio positioned for structural growth through data center exposure while maintaining focus on dividend growth, with four holdings increasing dividends 3.4% on average. |
| Mar 31 2025 | 2025 Q1 | AEE, AEP, ATO, AWK, CEG, CNP, EIX, ETR, EVRG, EXC, NGG, NI, PCG, SO, SRE, VST, XEL | Data centers, Defensive, dividends, infrastructure, regulation, Utilities | - | Utilities Plus outperformed declining markets in Q1 2025, benefiting from defensive positioning and lower rates. Portfolio enhanced dividend growth profile through strategic moves including initiating Xcel Energy and trimming data center exposure. California wildfire risks prompted Edison International exit. Utilities remain well-positioned for continued resilience with regulatory protection and growing income streams despite broader market uncertainty. |
| Dec 31 2024 | 2024 Q4 | AEP, AES, CEG, CNP, ETR, MDU, NEE, NI, PCG, SO, VST | AI, dividends, energy, Power, rates, regulation, Utilities | - | Utilities delivered strong 2024 performance despite Q4 rate headwinds. AI and data center demand drove outperformance in power producers like Vistra, which the fund trimmed after gains. Ten holdings raised dividends averaging 20%. The fund added to PG&E on growth expectations and maintains conviction in utilities' regulatory advantages and discounted valuations versus the broader market. |
| Sep 30 2024 | 2024 Q3 | ATO, AWK, BKH, CEG, CNP, DUK, ETR, MDU, MSFT, NEE, NEP, NI, PCG, VST | Data centers, dividends, income, nuclear, Power, rates, Utilities | - | Utilities delivered their best quarter in over 10 years, outperforming the broader market as the Federal Reserve cut rates for the first time since 2020. Independent power producers led on datacenter electricity demand, highlighted by Constellation's Microsoft nuclear deal. Portfolio changes reduced risk while maintaining growth exposure, with seven holdings increasing dividends by 4.1% average. |
| Jun 30 2024 | 2024 Q2 | ABBV, AVGO, BAC, BK, CAG, CAH, GILD, GS, JEF, JNJ, JPM, LYB, MDT, MRK, PAYX, PSX, RHI, RY, TRGP, UPS | Banking, Data centers, dividends, Energy Infrastructure, free cash flow, Natural Gas, Utilities | - | Miller/Howard argues dividend stocks are undervalued due to misleading free cash flow comparisons with non-dividend payers who rely on stock compensation. Their portfolios target companies with genuine cash generation and sustainable dividends, positioned for natural gas demand growth from data centers and energy transition while maintaining defensive characteristics amid economic uncertainty. |
| Mar 31 2024 | 2024 Q1 | AAPL, AES, AM, AMZN, ATO, BCE, CEG, CMCSA, CMS, CNP, CNQ, CSCO, CVX, DTE, EOG, EPD, EWBC, EXC, FTS, GILD, GOOGL, HESM, IPG, JNJ, JPM, KMI, KO, LAMR, LBRT, LNG, META, MPC, MSFT, NEE, NTAP, NTR, NVDA, OKE, ORCL, ORI, PAGP, PCG, PEG, POR, QCOM, SRE, STAG, TMUS, TRGP, TSLA, TTE, UPS, VST, WM | AI, dividends, energy, growth, Utilities, valuation | - | High-yield dividend stocks are set for revival as record market concentration in low-yielding mega-caps mirrors bubble conditions. Utilities benefit from AI-driven electricity demand growth expected to reach 4.7% over five years. Portfolio yields 3.3-3.5% with strong dividend coverage while trading at significant discount to broad market valuations. |
| Dec 31 2024 | 2023 Q4 | AES, BKH, ES, ETR, EVRG, NEE, NEP, OGS, PEG, POR, VST | dividends, energy, income, infrastructure, interest rates, Utilities | - | Miller/Howard's Utilities Plus Strategy capitalizes on utilities' superior dividend growth compared to fixed income. The sector ended 2023 positively despite broad market underperformance, benefiting from declining interest rates. Strategic portfolio adjustments included adding renewable energy exposure and increasing positions in companies with strong nuclear assets while trimming holdings facing regulatory or operational headwinds. |
| Sep 30 2024 | 2023 Q3 | AM, BK, CAG, CEG, CMCSA, EPD, GS, HESM, JPM, MPC, MPLX, NEE, NS, NTR, PAYX, SO, SUN, TRGP, TXN, VST | AI, dividends, energy, income, inflation, interest rates, Midstream, Utilities | - | Miller/Howard advocates for dividend-focused investing amid economic uncertainty and normalized interest rates. While markets rallied on AI excitement and multiple expansion, the firm warns against chasing speculative growth. Traditional recession indicators are flashing yellow, but real rates returning to normal levels should favor reliable dividend streams over future cash flow promises, supporting their defensive positioning strategy. |
| Jun 30 2024 | 2023 Q2 | AES, AM, BCE, BK, CAG, CAH, CHRD, CNP, CSCO, D, DCP, EMN, ENB, EPD, EXR, GS, HCA, JNJ, JPM, KEY, KNF, LBRT, LNG, LYB, MDU, MPC, MSFT, MSM, NGG, NVDA, OMAB, POR, PPL, PSX, RRC, RY, SBAC, SO, SUN, UGI, VLO, VST, WMB | dividends, energy, income, infrastructure, Recession, technology, Utilities, volatility | - | Miller/Howard demonstrates that dividend-paying stocks, particularly in defensive sectors, outperform over full cycles with lower volatility. The firm's income-focused strategies yield 3.5-3.7% while emphasizing companies with strong balance sheets capable of growing dividends through recessions. Current positioning favors utilities, healthcare, and quality technology names over cyclicals amid persistent economic uncertainty and recession risks. |
| Mar 30 2024 | 2023 Q1 | CMCSA, CMS, CPT, CSCO, DINO, EXR, GILD, GPC, HUN, IPG, KO, LAMR, MAA, ORI, POR, PPL, SO, STAG, TTE, UPS | Banking, dividends, energy, infrastructure, interest rates, real estate, Recession, Utilities | - | Miller/Howard navigates banking turmoil and recession risks by focusing on dividend-paying companies in defensive sectors. Banking stress makes recession likely, but utilities offer rebound potential after pullbacks. Energy transition drives cash-focused strategies. Real estate concentrates on multifamily housing avoiding office exposure. Fifteen holdings raised dividends in Q1, demonstrating management confidence despite economic uncertainty. |
| Feb 22 2023 | 2022 Q4 | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
Regulated UtilitiesRegulated utilities are experiencing accelerating capex growth driven by data center demand, electrification, and grid modernization. Aggregate annualized capex guidance for majority-regulated utilities in the S&P 500 Utilities Index increased 83% from $145B in 2022 to $265B in 2026, with year-over-year growth accelerating from 8% in 2023 to 23% in 2026. This capex expansion is constructive because utilities earn authorized returns on capital investments, making capex the primary driver of earnings growth. |
Capex Earnings Growth Grid Modernization Electrification Regulatory |
Data CentersData center power demand is a key driver of utility sector performance and capex expansion. The portfolio benefited from continued interest in AI and data-center-driven power demand in June. Independent power producers underperformed amid limited incremental data center deals and awaiting regulatory/political certainty. Alliant Energy signed a 370 MW electric service agreement, bringing contracted load to 3.4 GW with an additional 2-4 GW of mature opportunities. |
AI Power Demand Load Growth Contracted Capacity | |
RatesRising interest rates weighed on utility sector sentiment during the quarter, with the 10-year Treasury yield reaching a 2026 high of approximately 4.66% in mid-May. Utilities recovered some ground in June as Treasury yields fell. The sector's sensitivity to interest rates remains a headwind when yields rise and a tailwind when they decline. |
Treasury Yields Interest Rates Sector Sentiment | |
DividendsThe portfolio maintains a focus on high and growing income for investors. This quarter, 3 of the 31 holdings announced dividend increases with an average increase of 4.2% year-to-date. The firm's objective is to provide a high and rising stream of income with lower volatility than bonds or other income alternatives. |
Income Dividend Growth Yield | |
Biopharma M&ANextEra Energy plans to acquire Dominion Energy in an all-stock deal that would be the largest merger in the utility sector's history. NEE anticipates the transaction to close within 12-18 months and expects merger synergies to support a 9%+ long-term EPS compound annual growth rate. The deal announcement drove positive performance for Dominion Energy during the quarter. |
Merger Synergies EPS Growth Consolidation | |
| 2026 Q1 |
AIThe first quarter marked a turning point in AI market focus, shifting from infrastructure build-out to potential disruption. Agentic AI demonstrated significant progress in automating complex coding and multi-step processes. AI advancement threatens to reduce barriers to entry and erode competitive advantages across industries, particularly software companies. |
Agentic AI Disruption Software Automation Infrastructure |
DividendsDividend investing creates a natural barrier to chasing growth as high and secure dividends are mathematically incompatible with high P/E ratios. In an age of disruption, companies with lower P/E may offer a margin of safety that is essentially a hedge against the unknown. Miller/Howard maintains disciplined commitment to dividend investing for over three decades. |
Dividend Yield P/E Ratios Margin of Safety Income Valuation | |
GrowthGrowth stocks with premium multiples embed high levels of expected growth, with consensus estimates implying 21% EPS CAGR for Russell 1000 Growth Index. These long-duration investments are particularly exposed to disruption risk, with 60-75% of their value tied to terminal growth assumptions beyond 10 years. |
Growth Stocks Valuation Terminal Value Duration Risk Premium Multiples | |
Infrastructure SpendingHALO (Heavy Assets, Low Obsolescence) companies gained focus as investors sought to avoid disruption. These asset-heavy companies with physical moats include utilities, energy, industrial equipment, and transportation companies that cannot be digitized. The DJ Brookfield Global Infrastructure Index increased over 10% during the quarter. |
HALO Physical Assets Utilities Energy Transportation | |
ValuationThe letter provides extensive analysis of valuation theory, emphasizing how growth assumptions drive P/E ratios and terminal value calculations. Terminal value comprises 45-75% of total valuation in DCF models. Lower P/E ratios offer better visibility into near-term cash flows and reasonable valuations in uncertain times. |
DCF Models Terminal Value P/E Ratios Cash Flows Growth Assumptions | |
| 2025 Q4 |
AIAI infrastructure buildout continues to drive significant earnings growth for portfolio companies. Draft One AI tool for police reports shows material time savings and strong early adoption. AI Era Plan represents fastest booked Axon product to date with meaningful software value expansion per officer. |
AI Infrastructure Draft One AI Era Plan LLMs Police Reports |
SemiconductorsPortfolio includes major semiconductor positions in NVIDIA, Broadcom, and ASML with strong earnings growth. AI servers require greater connector content versus traditional servers, driving healthy organic growth. Positioned for next-generation data center architectures. |
NVIDIA Broadcom ASML Data Centers GPU | |
Data CentersProjected incremental 100GW of data center capacity necessary through 2030 creates large opportunity. Dense GPU racks require far more high-speed copper, fiber, and power interconnects than traditional servers. AI data centers drive structurally higher interconnect content. |
Data Center Capacity GPU Racks Interconnects Fiber Optic Power Solutions | |
GrowthPortfolio companies delivered average 2025 YTD EPS growth rate of 27% versus performance of 7%, creating stored alpha opportunity. Edgewood portfolio remains attractive with compelling earnings growth presenting investment opportunity despite trailing benchmarks in 2025. |
EPS Growth Stored Alpha Earnings Outperformance Fundamentals | |
| 2025 Q3 |
Data CentersExcitement around data centers and their implications for US electricity demand have been a major driver of utility performance. The requisite power generation and high-voltage transmission needed to deliver that power represents a clear opportunity for utilities to deploy incremental capital and earn regulated returns. |
Power Electricity Infrastructure Capital Growth |
TransmissionThe DOE's 2024 National Transmission Planning Study called for more than doubling of current transmission capacity by 2050, requiring 5,000 miles per year of high-capacity transmission. This represents a clear opportunity for utilities to deploy incremental capital and earn regulated returns, bolstering growth and income generation. |
Grid Infrastructure Capacity Investment Regulated | |
Energy TransitionElectrification trends and reshoring of manufacturing are driving increased US electricity demand. The sector benefits from AI enthusiasm and expectations of further monetary easing, with utilities positioned to capitalize on the transition through infrastructure investments. |
Electrification Manufacturing Infrastructure Investment Growth | |
DividendsFour of the portfolio's 32 holdings announced dividend increases with an average increase of 3.4% year-over-year. The capex deployment will bolster utilities' growth and their ability to provide investors with high and rising income. |
Income Growth Yield Distribution Returns | |
| 2025 Q2 |
Data CentersExcitement around data centers and their implications for US electricity demand have been a major driver of utility performance. The requisite power generation and high-voltage transmission needed to deliver that power represents a clear opportunity for utilities to deploy incremental capital and earn regulated returns. |
Power Electricity Infrastructure Growth Capital |
TransmissionThe DOE's 2024 National Transmission Planning Study called for more than doubling of current transmission capacity by 2050, implying the need to build 5,000 miles per year of high-capacity transmission. This represents a clear opportunity for utilities to deploy incremental capital and earn regulated returns. |
Grid Infrastructure Capacity Investment Growth | |
DividendsThis quarter, 4 of our 32 holdings announced dividend increases with an average increase of 3.4% year-over-year. The formulaic connection between spending levels and earnings growth will bolster utilities' growth and their ability to provide investors with high and rising income. |
Income Growth Yield Increases Distribution | |
| 2025 Q1 |
Dividends15 of 31 holdings announced dividend increases with an average increase of 5.4%. Portfolio transactions were focused on improving dividend and earnings growth profile, which historically leads to outperformance. |
Dividend Growth Income Yield Distribution |
Data CentersPortfolio reduced exposure to data center and AI trends after a period of relative outperformance by trimming positions in Entergy, NiSource, and Vistra Corp. Data center-related growth could increase Southern Co's EPS growth to the upper end of its 5% to 7% range by 2027. |
AI Cloud Infrastructure Growth | |
Regulated UtilitiesTraditional large-cap regulated utilities benefited from investors' preference amid market uncertainty. The regulatory construct provides reasonable return on investment with generally inelastic demand and ample growth projects. |
Regulation Stability Infrastructure Defensive | |
| 2024 Q4 |
AIData center and artificial intelligence trends are driving growing electricity demand, benefiting power producers like Vistra Corp. The company was the second-best performing name in the S&P 500 this year as a key beneficiary of these trends. Entergy also increased guidance due to META's plans to build a $10B AI data center in northeast Louisiana. |
Data Centers Electricity Demand Power Growth Technology |
DividendsTen of the fund's 32 holdings announced dividend increases this quarter with an average increase of approximately 20%, including a 150% increase declared by PG&E Corp. The fund continues to focus on utilities' ability to deliver high and growing income with attractive risk-adjusted returns. |
Income Growth Yield Distribution Returns | |
RatesInterest rate headwinds resurfaced as the 10-year Treasury yield increased roughly 80 basis points in the quarter. The Federal Reserve indicated fewer expected rate cuts in 2025 amid higher-than-anticipated inflation. Water utilities and renewable developers lagged on interest rate sensitivity. |
Federal Reserve Treasury Inflation Monetary Policy Sensitivity | |
Regulated UtilitiesUtilities' unique regulatory structure is designed to provide reasonable and consistent returns on investment, making their earnings easier to project. The fund believes this regulatory framework creates a constructive backdrop for risk-adjusted returns and makes utilities a compelling solution for client portfolios. |
Regulation Earnings Predictability Structure Framework | |
| 2024 Q3 |
Data CentersRising electricity demand from datacenter trends remained at the forefront of investors' minds and drove independent power producer performance. Constellation Energy's 20-year power purchase agreement with Microsoft to restart Three Mile Island nuclear unit created a catalyst for the group. |
Electricity Nuclear Power Microsoft Constellation |
RatesUtilities benefited from increasing visibility into a lower-rate environment, culminating with the Federal Reserve lowering rates for the first time since 2020. Historical analysis shows utilities outperformed following initial rate cuts in previous easing cycles. |
Federal Reserve Treasury Easing Headwinds Performance | |
Independent Power ProducersIPPs continued to lead the utilities group as rising electricity demand from datacenter trends remained prominent. Performance was relatively flat until late September when the Microsoft-Constellation deal created momentum through quarter end. |
Electricity Nuclear Power Generation Demand | |
DividendsSeven of the fund's 32 holdings announced dividend increases during the quarter with an average increase of 4.1%. The strategy focuses on delivering high and growing income for investors regardless of interest rate trajectory. |
Income Growth Increases Yield Distribution | |
| 2024 Q2 |
DividendsThe letter extensively analyzes dividend-paying stocks versus non-dividend payers, arguing that dividend payers have higher quality free cash flow after adjusting for stock-based compensation. Regular dividend payers return 91% of free cash flow to shareholders through dividends and buybacks, compared to 53% for non-dividend payers. |
Dividend yield Dividend growth Dividend coverage Shareholder returns Free cash flow |
BuybacksThe analysis shows buybacks reduce share count with 85% efficiency on average, but effectiveness varies significantly due to stock-based compensation and acquisitions. The letter argues dividends are more predictable than buybacks, with 96% correlation year-over-year versus lower correlation for buybacks. |
Share repurchases Share count Capital allocation Dilution Management compensation | |
Natural GasUS natural gas demand reached record highs in 2023, driven by power generation replacing coal plants and growing LNG exports. Future demand growth is expected from data centers, electric vehicles, and nearshoring trends, with LNG export capacity expected to double through 2027. |
LNG exports Power generation Data centers Pipeline capacity Export facilities | |
Data CentersData center electricity demand is identified as a key driver for natural gas consumption and utility growth. The letter discusses how rising electricity demand from AI and data center trends creates opportunities for independent power producers and utilities with regulated generation projects. |
Electricity demand AI infrastructure Power consumption Grid capacity Technology infrastructure | |
Energy TransitionThe transition from coal to natural gas and renewables in power generation is highlighted as a major trend. Coal plants continue to be retired and replaced with natural gas and renewable sources, driving increased natural gas demand despite flat electricity consumption over two decades. |
Coal retirement Renewable energy Power generation Grid modernization Clean energy | |
| 2024 Q1 |
DividendsHigh-yield dividend stocks have historically outperformed the S&P 500 by 1.3% annually over 75 years with lower volatility. Recent underperformance is attributed to market concentration in mega-cap tech stocks with low dividend yields. The manager expects dividend stocks to resume outperformance when market concentration reverses. |
Dividend yield Income Outperformance Market concentration Valuation |
Energy TransitionElectricity demand is inflecting upward after 20 years of flat growth, driven by AI and data centers. Grid planners now expect US electricity demand to grow 4.7% over five years, with data center demand potentially doubling by 2030. This creates opportunities for utilities and power generators. |
Data centers Power demand Grid infrastructure Electricity growth AI | |
AIArtificial intelligence is driving significant electricity demand growth through data center proliferation. The market has shown excitement around AI beneficiaries, particularly independent power producers. However, the manager questions whether current AI valuations are justified and warns against paying too much for even correct investment stories. |
Data centers Power demand Valuation Technology Growth | |
UtilitiesUtilities are positioned to benefit from rising electricity demand driven by AI and data centers. The portfolio focused on utility growth by adding positions in companies with better growth profiles. Utilities trade at significant discounts to historical levels relative to the S&P 500. |
Power demand Growth Valuation Infrastructure Regulated | |
| 2023 Q4 |
DividendsThe letter extensively discusses dividend growth as an underappreciated tailwind, showing how companies with larger dividend increases historically outperform. The analysis demonstrates that dividend increases compound to substantially higher income over time, with 40 basis points of annual increases tripling the beginning yield after 10 years. |
Dividend Growth Income Yield Coverage Increases |
UtilitiesUtilities marched steadily higher during the quarter, ending 2023 on a high note. The sector outperformed other defensive sectors like consumer staples and healthcare. Interest rates remained a primary driver, with easing rates reversing the headwind that had loomed large through much of the year. |
Interest Rates Defensive Regulated Stability Infrastructure | |
Energy TransitionThe letter discusses renewable energy exposure and companies with renewable development. They used weakness among companies with renewable development exposure as an opportunity to add to positions in AES Corp., NextEra Energy, and NextEra Energy Partners. |
Renewables Clean Energy Nuclear Grid Development | |
| 2023 Q3 |
DividendsThe firm emphasizes dividend-focused investing as a reliable source of returns, noting that dividends have continued to chug along this year while earnings expansion has been in short supply. They highlight that high-dividend-yield stocks have historically outperformed during recessions and provide downside protection. |
Dividend Growth Income Yield Coverage Sustainability |
InflationInflation has trended down as a result of the Fed's aggressive interest rate hikes combined with the resolution of most supply chain problems. However, inflation remains well above the Fed's 2% target, and the firm expects inflation fears to keep interest rates high going forward. |
CPI Fed Policy Interest Rates Monetary Policy Price Pressures | |
Energy TransitionThe firm discusses nuclear power through their position in Constellation Energy Corp., expecting the company to benefit from legislation in the Inflation Reduction Act that extends the life of its nuclear fleet. They also note the ongoing evolution of the midstream sector with stronger balance sheets. |
Nuclear Clean Energy Infrastructure Regulation Sustainability | |
UtilitiesThe utilities sector declined for the third consecutive quarter, with interest rates being the primary headwind. The firm maintains that their Utilities Plus Strategy provides an income solution superior to bonds, with dividend growth potential that can surpass Treasury yields over time. |
Regulated Interest Sensitivity Yield Infrastructure Essential Services | |
MidstreamMidstream had a solid quarter, easily outperforming the broad market. The sector has evolved with stronger balance sheets, reduced debt levels, and improved free cash flow generation. Management teams continue to aim for lower leverage with some companies receiving investment-grade credit ratings. |
Pipelines Energy Infrastructure Cash Flow Distribution Balance Sheet | |
AIThe firm notes that excitement over artificial intelligence prospects has driven much of this year's market performance, with seven AI-linked stocks accounting for 84% of the S&P 500's year-to-date performance. However, they warn that chasing tech bubbles is dangerous based on historical precedent. |
Technology Innovation Valuation Speculation Market Concentration | |
| 2023 Q2 |
DividendsThe letter extensively analyzes dividend-paying tech stocks versus non-payers, finding high-dividend tech stocks outperformed when excluding the internet bubble period. During recessions, dividend increases still outnumber decreases by 3-to-1, with companies having lower leverage and stronger fundamentals more likely to maintain dividend growth. |
Dividend Growth Dividend Coverage Dividend Yield Dividend Cuts Dividend Increases |
UtilitiesUtilities demonstrated reliable dividend performance with 69% of utilities increasing dividends over 25 years, showing no material change during recessions. The sector exemplifies the durability of the regulated business model for income investors seeking dependable and growing income streams. |
Regulated Utilities Utility Dividends Defensive Sectors Regulated Business Model Utility Performance | |
EnergyEnergy stocks traded in a narrow range amid macro uncertainties, with oil prices drifting lower on weaker demand. The portfolio offers 3.6% yield supplemented by buybacks and special dividends, with E&Ps committing to base dividends supported by $40/barrel oil plus formulaic return of capital at higher prices. |
Energy Stocks Oil Prices Energy Dividends Energy Value Chain Natural Gas | |
InfrastructureThe Infrastructure Strategy invests in essential service providers with high barriers to entry, positioned to generate stable performance with relatively low volatility. The strategy has a beta of 0.75, providing dampened reactions to market fluctuations while targeting long-term performance. |
Infrastructure Investing Essential Services Low Beta Stable Performance Barriers to Entry | |
| 2023 Q1 |
DividendsMiller/Howard emphasizes dividend-paying companies across all strategies, with 15 holdings increasing dividends in Q1 2023. The firm believes dividend commitments signal management confidence in stable cash flows and impose discipline on capital allocation. High-dividend-yield stocks outperformed the S&P 500 over 30 years with lower volatility. |
Dividend Growth Income Cash Flow Shareholder Returns Capital Allocation |
Credit StressBanking turmoil began with Silicon Valley Bank's failure due to interest rate risk on long-dated bonds, followed by Signature Bank and Credit Suisse. Banks are tightening lending standards and borrowing heavily from the Fed. The firm expects further credit contraction and views recession as more likely than not. |
Banking Crisis Interest Rate Risk Lending Standards Liquidity Fed Funding | |
Regulated UtilitiesUtilities underperformed in Q1 2023 as investors rotated to higher-risk securities and Treasury yields rose above 4%. The firm initiated Portland General Electric and increased Southern Company positions. Utilities historically rebound after 10%+ pullbacks, with strong sector tailwinds from decarbonization targets supporting capital deployment. |
Utility Stocks Interest Rate Sensitivity Decarbonization Capital Deployment Defensive Positioning | |
Energy TransitionThe energy transition is creating a permanent market feature where energy companies prioritize cash generation over growth investments. This shift toward free cash flow discipline is driven by messaging that demand for fossil fuels will diminish over time, creating attractive opportunities for income-seeking investors. |
Free Cash Flow Capital Discipline Energy Companies Cash Generation Investment Strategy | |
RatesThe Fed has been raising rates since March 2022, with 2-year Treasury yields dropping below Fed funds rate in November 2022, signaling recession expectations. Bond markets predict rate cuts within a year, with the yield curve inversion indicating economic growth will turn negative soon. |
Federal Reserve Interest Rates Yield Curve Recession Signal Bond Market | |
Commercial Real EstateThe firm focuses on defensive real estate sectors including multifamily housing, warehousing, billboards, and self-storage while avoiding risky niches like office buildings and retail centers. They initiated positions in Mid-America Apartment Communities and Camden Property Trust, expecting strong apartment demand due to high mortgage rates. |
Multifamily Housing REITs Defensive Real Estate Apartment Demand Real Estate Investment |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| No Elevator Pitches found | ||||||||||
| TICKER | COMMENTARY |
|---|---|
| XEL | We added to our position in Xcel Energy (XEL), which trades at a discount to high-growth peers despite its premium EPS growth profile, supported by incremental capex opportunities and a strong record of consistent execution. |
| NEE | NextEra Energy (NEE) plans to acquire Dominion Energy (D) in an all-stock deal. If approved, it would be the largest merger in the utility sector's history. NEE anticipates the transaction to close within 12–18 months and expects merger synergies to support a 9%+ long-term EPS compound annual growth rate. NextEra Energy (NEE) plans to acquire Dominion Energy (D) in an all-stock deal. NEE expects the transaction to close within 12–18 months and anticipates merger synergies to support a 9%+ long-term EPS CAGR. |
| D | NextEra Energy (NEE) plans to acquire Dominion Energy (D) in an all-stock deal. If approved, it would be the largest merger in the utility sector's history. NEE anticipates the transaction to close within 12–18 months and expects merger synergies to support a 9%+ long-term EPS compound annual growth rate. NextEra Energy (NEE) plans to acquire Dominion Energy (D) in an all-stock deal. NEE expects the transaction to close within 12–18 months and anticipates merger synergies to support a 9%+ long-term EPS compound annual growth rate (CAGR). |
| AEP | 1Q earnings exceeded expectations. AEP raised its 2026–2030 capital plan by $6B and identified over $10B of incremental investment opportunities. Management raised its long-term EPS CAGR guidance to >9% through 2030. |
| VST | 1Q EBITDA beat consensus expectations and VST reiterated 2026/2027 EBITDA guidance. Management continues to highlight expected incremental demand from data centers, industrial activity, and ongoing electrification. |
| LNT | LNT's earnings beat consensus estimates. The company signed a 370 megawatt (MW) electric service agreement, bringing contracted load to 3.4 GW, with an additional 2-4 GW of mature opportunities. The company highlighted it would update its capital plan guidance in 3Q. |
| ETR | 1Q earnings were in line with consensus. In June, ETR hosted an analyst day and introduced a new $67B 2026–2030 capital plan and extended its long-term EPS CAGR of >8% through 2035. |
| CEG | 1Q earnings beat consensus. CEG lagged amid regulatory/political uncertainty and investor caution around the release of locked-up shares related to the Calpine acquisition. Management reiterated confidence in its 20%+ EPS growth guidance through 2029. |
| ATO | ATO's earnings beat expectations. Management raised fiscal year 2026 EPS guidance by 2.4% to $8.45 at the midpoint, setting a new base for its 6–8% long-term EPS CAGR. Despite the guide-up, local distribution companies have lagged given lower EPS growth profiles and limited AI/data center opportunities. |
| SRE | SRE reported earnings in line with consensus and reaffirmed its 7-9% long-term EPS CAGR target. SRE lagged amid worsening California regulatory concerns, including elevated bill pressures, wildfire liability risk, and less constructive gubernatorial candidates. |
| PPL | 1Q earnings slightly beat consensus. PPL underperformed amid a deteriorating regulatory environment in Pennsylvania, with Gov. Shapiro's pushback on Exelon's (EXC) rate case, amplifying concerns ahead of PPL's pending PA rate case. Despite this, PPL received a constructive outcome in PA. |
| EXC | PPL underperformed amid a deteriorating regulatory environment in Pennsylvania, with Gov. Shapiro's pushback on Exelon's (EXC) rate case, amplifying concerns ahead of PPL's pending PA rate case. |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
|---|---|---|---|---|---|
| No Recent Buys Data | |||||
| Ticker | Put/Call | Amount Sold | Shares Sold | % Change | Weight % | Status |
|---|---|---|---|---|---|---|
| No Recent Sells Data | ||||||
| Industry | Prev Quarter % | Current Quarter % | Change |
|---|---|---|---|
| No industry data available | |||
