Today the market has been up and sideways basically, perhaps a little more defensive this afternoon,...
Alliant: A "Split" Buy Among Utilities
07/05/2016 12:00 am EST
The evening news has been filled with dramatic stories lately; for investors, I urge a differentiation between what keeps the news people in business and what keeps our businesses in business, urges Neil Macneale, editor of 2-for-1 Stock Split Newsletter.
Economic news has generally been good, but the market pundits can’t seem to resist putting a negative economic spin on every headline, regardless whether the news item relates directly to the economy or not, and stocks suffer as a result.
This is not to say the stories in the headlines are not important.
They are very important, but they are rarely a reason to re-think your entire investment strategy. So enjoy your summer and put your investments on cruise control.
The 30 companies that make up the 2 for 1 portfolio, by and large, make and/or sell things we all need on a day-to-day basis. They will be making and selling regardless of what headline may be distracting us at the moment.
The latest addition to our model portfolio is Alliant Energy (LNT), which announced its stock split in April. Although we didn't issue a buy recommendation last year, when compared to the May split announcements, it now comes out as #1.
Alliant is a regulated gas and electric utility operating in the upper mid-west. As noted last month, LNT also operates several unregulated power generation and transportation businesses in concert with its primary functions.
LNT’s very low volatility (a beta of 0.39) stands out, its 3.21% dividend is very nice, and all of its other numbers are also okay and, together, give us the picture of a very stable, well run business.
LNT is more profitable than its peers, with better top and bottom lines, while maintaining a lower long-term debt ratio than its industry average.
Because LNT’s stock price is up a bit from last month, the dividend yield is now at 3.03%; still very nice. With the market near all-time highs, a boring but stable and profitable utility seems a very good bet.
By Neil Macneale, Editor of 2-for-1 Stock Split Newsletter/strong>
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