Two months later I recommended it to my readers. In the following six months its shares rose 15 percent. On February 25, 2009 utility company, FPL Group (NYSE:FPL), made a similar announcement. I began looking into the company right away. This time it only took me two weeks to recommend the company to my readers. In the following four months its shares rose 33 percent.

On March 11 Coke (NYSE:KO) made the same announcement. On April 1st, 2009 I recommended it. In just three months it’s gone up nine percent.

These three companies are members of a class of companies I call the “Group of 88.” They all love to please their shareholders.

So, what is this Group of 88?

Many of the companies belonging to the Group of 88 you know: Not only Coke, but also companies like Johnson and Johnson (NYSE:JNJ), IBM, Verizon (NYSE:VZ), McDonalds (NYSE:MCD) and Starbucks (NASDAQ:SBUX).

Many of them you don’t know. You probably haven’t heard of companies like VSE Corporation (NASDAQ:VSEC), W.P. Carey & Company (NYSE:WPC) and National Fuel Gas Company (NYSE:NFG).

These companies come in all sizes and from all kinds of sectors. And, since the beginning of the year, they all have one thing in common. All of them have raised their dividend.

Increasing dividends has always been a surefire way to please shareholders. So why have dividend hikers increased in popularity?

•    They’re now in the minority. For the first time in decades more companies are cutting rather than raising dividends.
•    They’re the ultimate “show-me-the-cash” companies. Dividends can’t be faked or staged. They must be paid for by real cash earnings.
•    They’ve become the alternative safe-haven group of companies to triple-A rated companies. The rating agencies – S&P, Moody’s, and Fitch – had given triple-A status to junk assets that crashed the global economy. Their grades aren’t taken nearly as seriously anymore.

Many of these dividend-paying companies give you interest payments of 4, 5, 6 percent and more. Compare that with 2-year U.S. government bonds giving 2 percent interest … or 10-year bonds giving 3.66 percent interest … or Canadian 10-years giving 3.43 percent and Germany’s giving 3.5 percent.

This is the perfect time to invest in recent dividend hikers. Several have been raising dividends not just over, say, the past 10-20 quarters but over the past 10-20 years!  Think about it. Many of them have raised dividends during oil embargoes, dotcom busts, and stagflation. They’ve proven themselves many times over.

And by recently raising their dividends, they’re showing investors once again that they’re the companies you can trust … they’re the ones generating real cash earnings … and that they’re the ones which will make it through these treacherous times and lead the market back up on the other side of the recession.

Invest well,
Andy

Source: Investors Are Flocking to a New Group of Companies

This from Andrew:

Two weeks ago I sold the Virginia-based utility company Dominion Resources (D).  I got out at a double-digit profit.

Of all the utilities in the S&P 500, Dominion had the best earnings growth (38.5%) last quarter. So why did I get rid of the stock?

When I recommended it in mid-2005, electricity consumption was still rising and regulated rates were providing cover for rising energy costs. Dominion also had productive gas fields in Texas and expanding Liquified Natural Gas (LNG) ports.

But now the sector is heading in the wrong direction.

In the last week alone the utility sector lost 8.2 percent. Only the financial, conglomerates and industrial goods sectors have done worse – recording bigger losses over the past week and last three months.

I got out just in time. Since I exited my position in Dominion, it has lost 9.1 percent. But as you can see, Dominion has lots of company…

As recently as last quarter, utilities were holding up fine. Their profits had risen an average of 5.3 percent (unweighted) and 0.9 percent (weighted). Along with health care and consumer staples, utilities formed a strong line of defense against the encroaching recession.

So what the heck happened?

Listen, utilities have certain advantages, like fixed prices, monopoly-like markets, and a consistent revenue stream.

But that revenue stream has sprung a few leaks. Listen to CEO Lewis Hay of Florida Power & Light (FPL)…

“A lot of people think demand for electricity is inelastic. It’s not. Our customers are cutting back, and they’re not paying their bills, either.”

I wrote to my readers last week that “I’m not quite ready to put utilities in the same category as banks…”

But utilities are sounding more and more like banks. Here’s another utility CEO, Michael Morris of American Electric Power (AEP), sounding off…

“Clearly, industrial sales will be off,” he said, “we’re selling less electricity to neighboring utilities as their needs drop.”

The recession has finally caught up to the utilities. As a result, utilities are husbanding their cash along with all the other companies…

APE is cutting back spending from $2.5 billion to $1.25 billion. FPL is and Georgia Power is also cutting back.

And in the strongest sign yet that the utility sector is no refuge for investors, two utilities cut their dividend last week: Ameren (AEE) and Constellation Energy (CEG).

Investors made a lot of money shorting banks. I’m not ready to put utilities in the same camp as the banking sector, but the weaker companies in the utility sector definitely represent shorting opportunities. My Red Flag portfolio used to be full of banks and financials. My bets that their shares would sink made mostly triple-digit gains.

Last week I added a couple of utilities to the portfolio. The utility sector is catching up to the rest of the economy – and not in a good way.

Source: Why Utilities Are No Longer a Refuge for Safe Investors

This from the Smart Profits Report:

“It’s all the same… Only the names will change”
– Bon Jovi

Ah, “politics as usual” – I knew it wouldn’t take too long before this age-old scenario reared its ugly head once again.

Having swept into office on a tsunami-like wave of goodwill, President Obama saw it evaporate this week after the House of Representatives passed the $819 billion spending bill along traditional party lines.

Partisan politics as usual.

With a mandate from a highly expectant American public to back them, it was hoped that Obama and his Democrat-controlled Congress would enact some meaningful changes on Capitol Hill.

Alas, the bill appears filled with more pork than the dumplings at the House of Nanking.

The fact that House Republicans did not support the bill and that their counterparts in the Senate will likely do the same is bad for investors.

Wait a minute! You just said the bill is pork laden. How could opposing it be bad for investors? I’ll tell you why…

Washington Loves Whine With Its Cheese

Thanks to the large majority that the Democrats hold in Congress, the bill or one very similar is going to pass. No issues there.

But by having a divided Congress, Washington is basically telling the American people that, despite Obama’s warm, uplifting rhetoric, nothing has actually changed. The two political parties are still sniping away at each other with gusto, blaming each other for the nation’s problems – past, present and future.

But in order for the economy and the markets to stabilize and get healthy again, we need some darn consensus. You know, the idea that everyone is actually on the same page and are working to fix things.

I know… what a terribly old-fashioned, optimistic notion.

But make no mistake… this is critical to the fragile public psyche.

Confidence Breeds Cash

The market – and to some degree, the economy – is the product of emotion and sentiment. Yes, there are certainly structural issues and flaws that cannot be ignored, but the fact is that if people feel hopeful that change is coming and that progress is being made, they will start to open their wallets. And what will start with a trickle will eventually snowball and will get the economy moving again.

That obviously doesn’t hide the fact that we also need large fixes to the economy and financial system. But consumer and investor sentiment is an integral element.

So that said, I’ll hop down off the soapbox now and get to the meat of the situation – discussing some stocks that could be beneficiaries of the government’s largesse over the next few years…

*********

Forget Oil… This Is The World’s Most Critical Commodity

For all the talk about oil, there’s another critical commodity that the world simply can’t live without. In fact, it may be even more important than oil.

Water.

Under the government’s spending plan, water projects will receive $8.4 billion. I believe this is one industry that will receive a major boost from the increased infrastructure spending, with governments around the world expected to shell out hundreds of billions of dollars over the coming years.

This is why recently added one of the financially stable, fast-growing companies in the industry to the Xcelerated Profits Report portfolio – one that enables water desalination plants to save significant amounts of money by capturing wasted energy and recycling it back into the system. Desalination will be a critical component if the world’s water needs are going to be met.

I can’t reveal the name of the stock to you here, but what you can do is check out how you can become a member yourself and start profiting from this and our other recommendations right away. We’ve got all the details here.

Here are some more potential winners…

These Two Sectors Are Set For Huge Cash Injections… And Here Are Two Firms That Could Benefit

Energy: Energy projects will receive nearly $40 billion worth of federal funds. A good chunk of this will go towards renewable energy – a big part of Obama’s energy plan.

FPL Group (NYSE: FPL) is the largest solar and wind energy provider in the U.S., and is the electric company for most of Florida.

It’s no secret that the real estate collapse has crippled south Florida’s economy. And Miami is the metropolitan area that will receive the most federal dollars for infrastructure projects. Any rebound in south Florida economic activity should bode well for FPL. The stock also currently boasts a 3.5% dividend yield.

Healthcare Information Technology: This sector will receive $17 billion. Even without the government cheese, I like this area, as it’s a necessary component for streamlining the healthcare system.

Consider a stock like Quality Systems (Nasdaq: QSII). Its earnings are projected to grow by 18% per year over the next five years, yet the stock is trading at 19 times forward earnings. QSII has plenty of cash, no debt, is cash flow positive and sports a 3% yield.

As we’ve said numerous times before here, there are quality companies that will not only survive, but thrive during the economic malaise. And although it may seem far off now, we will eventually return to an environment where many more companies have the opportunity to grow and reward their shareholders and employees.

In the meantime, our elected officials seem to be telling us (with half-hearted apologies to John Bon Jovi) that, “Bad medicine is what you need.”

Note to Washington: No, it isn’t.

Source: Three Sectors And Two Stocks That Could Benefit From “Hope And Change”

That’s because traders dumped energy stocks as oil came down off its late July highs. The market also ditched infrastructure stocks, banking on less infrastructure projects thanks to less demand for oil.

Don’t bet on it. The world still depends on crude oil. And even if people are driving less, they still have to get around.

Dave has picked three energy and infrastructure stocks that are bargains right now…

We’ve all heard, “A rising tide lifts all boats,” which could be applied to the oil and the energy sector, both flying high before the recent oil correction. All of a sudden, oil and energy stocks were the “happening” sectors, and everyone was buying them.

Frankly, it was hard to find an energy stock that wasn’t going along with oil’s ride. Alternative energy companies, oil service operations, even oil rig helicopter shuttle services rose, all on the thought that their products would ultimately help to produce more oil or reduce its consumption.

Good logic, to be sure, but only until something changes, either real or perceived. Of course the “change” was that people found ways to use less oil by driving fewer miles… 9.6 billion fewer in May from a year ago. Eureka. And once Wall Street processed this information, the “sell everything” mentality kicked in.

As is often the case, the market sold first and is only now contemplating whether the rout might have been a bit overdone, “Throwing out the baby with the bathwater,” as it were…

The Energy Sector Is Now For Sale

Not only were oil drillers and oil service stocks hit, anything even remotely connected to the entire energy sector was sold off indiscriminately.

But it didn’t stop there: Infrastructure stocks were hit, too, with the thought being that less oil being used and/or lower prices will require less infrastructure.

Don’t believe it. While people are driving less, they’re riding buses, trains or subways more. New York City subway ridership was up 6.5% in April over a year ago, indicating a change of habits. Similar changes are happening elsewhere in the United States.

That’s more wear and tear on the infrastructure, and if even more people make the switch, more track will have to be laid, cars added, terminals built, etc.

• Translation: Infrastructure spending will increase anyway, it will just be for different “stuff.”

When markets correct, human logic and reason go out the window, the selling is overdone, and that usually results in great investment opportunities when the dust finally settles.

The reality is, regardless of what the market sentiment might be on any given day, energy use is growing, and new infrastructure is needed just about everywhere. This is particularly true in emerging economies, like that of China, India and others. And old infrastructure here in the United States is in dire need of replacement.

International Energy Agency Predictions

In spite of short-term corrections, the International Energy Agency predicts that by 2030, overall energy use will increase 55% from today’s levels. And it’s been estimated that $22 trillion of new infrastructure projects will be required in the same timeframe.

And while the world might be angling towards using less crude oil, overall energy use is continually rising, and will have to be made up from some other source. People still need to get around, whether it’s in a car, truck, bus, train or plane. Those vehicles all require some form of energy.

Which brings me to my theory: That what we are in fact witnessing is the start of a long-term shift in energy use, and the subsequent dawn of the post-oil energy era. A true energy paradigm shift, if you will.

And while we can argue that $4-a-gallon gas is hard on the economy, it’s served as a catalyst to get alternative energy sources underway in a serious fashion. Not a day goes by now without the two front-running candidates talking about their respective views on energy.

And while political hot air currently isn’t a valid energy source, it’s a start in the right direction.

Investors – Continue to Watch the Energy Sector

My advice is to keep one eye on the infrastructure and energy sector – companies like:

• General Electric (NYSE: GE)
• FPL Group (NYSE: FPL)
• And Caterpillar (NYSE: CAT)

While there’s a shift underway, little else has fundamentally changed. Many of these companies’ shares are selling for less that 50% of what they were only a few months ago. And that makes them outright bargains in my book.

P.S. For more ideas see The T. Boone Pickens Way: How to Supercharge Your Portfolio

Source: Another Solid Sector Goes ‘On Sale’

Fortunately for Pickens, he has a plan to move away from volatile oil. It’s called the Pickens Plan. It involves converting US cars to run on natural gas instead of petroleum and devleoping a massive wind farm in Texas.

Floyd Brown at Investment U says Pickens has a history of being in the right place and the right time and profiting handsomely. Floyd has picked four stocks to help you follow Pickens’ lead into natural gas and wind energy…

T. Boone Pickens is a proponent of the much-debated peak oil theory. He believes the oil price shocks we have experienced this year are only the beginning. He sees much tighter supplies in the future.

“America is in a hole,” he told CNBC last month, “and it’s getting deeper every day. We import 70% of our oil at a cost of $700 billion a year – four times the annual cost of the Iraq war. I’ve been an oilman all my life, but this is one emergency we can’t drill our way out of. But if we create a new renewable energy network, we can break our addiction to foreign oil.”

“In 10 years, $5 trillion goes out of the country for oil. It’s nuts. It’s the greatest transfer of wealth from one area to another in the history of the world.”

Instead, he wants this money to stay in America – with a good portion of it going into his pocket.

His plan is simple. Cars need to be converted from crude oil and gasoline to compressed natural gas as soon as possible. And to replace the natural gas used in electrical generation, he advocates a giant wind farm stretching from Texas to North Dakota.

“America is the Saudi Arabia of wind,” he likes to say.

T. Boone Pickens Has An Energy Plan to Save Our Economy

To be sure, Pickens has an energy plan to save our economy – he is building the largest wind farm in America. It will generate as much clean electricity as two nuclear plants, and, best of all, with little negative effect on the environment.

His commitment to clean fuels has impressed the environmental community, prompting the Sierra Club’s director Carl Pope to say, “To put it plainly, T. Boone Pickens is out to save America.”

But don’t believe that he’s lost his focus on making money because he is in his 80s. “Money! First thing, it’s about money,” Pickens told Fast Company magazine in June.

“Of course, I’m also a good environmentalist. I can pass the saliva test. But I’m not going to go do a 4,000-megawatt wind farm for the environment first and money second. I’d rather go give money someplace else. You’re talking about $10 billion.” And what kind of return does he expect? “A minimum of 15%; it’ll probably be closer to 25%.”

Last year he also brought Clean Energy Fuels (Nasdaq: CLNE) public – a company that markets natural gas for vehicles. It designs, builds, finances and operates 170 fueling stations and supplies compressed natural gas and liquefied natural gas. But what it doesn’t have is profits.

With Mr. Pickens owning 16 million shares, don’t expect that to slow this company down. Management is growing revenues at a rate of 25% per year.

I don’t have much taste for the shares of any company without positive earnings, such as Clean Energy Fuels. But the current downturn in natural gas prices has hit stocks in this sector hard. Today, a number of these gas stocks are cheap for the first time in over a year.

Natural Gas Stocks & Wind Power – The Pickens Plan

Two firms that specialize in natural gas exploration and production that have recently pulled back from elevated highs include:

• Chesapeake Energy (NYSE: CHK), with a forward price-to-earnings ratio (P/E) of only 9.
• Devon Energy (NYSE: DVN), which has a P/E of 9.

In terms of wind power:

• General Electric (NYSE: GE) is one of the world’s largest manufacturers of wind turbines. With over 8,400 installed worldwide, it provides power generation capacity of more than 11,300 megawatts. GE currently trades at a very attractive P/E ratio of 13.5 and a 4% dividend yield. It pays you to hold its stock.
• FPL Group (NYSE: FPL) is the diversified utility and power generator that grew out of Florida Power and Light. It leads the nation in the development and operation of wind power. With more than 45 facilities located in 15 states, it has a generating capacity of more than 4,000 megawatts of electricity.

This represents approximately 35% of the nation’s wind-generated power.

There are many ways that our country is working to free itself from its energy shackles, and I don’t know if America will embrace the Pickens Plan above all others.

But T. Boone Pickens has a history of being in the right place at the right time, and profiting handsomely. By following in his footsteps and investing like him, you stand to make a bundle as well.

Source: The T. Boone Pickens Way: How To Supercharge Your Portfolio