After spending a month or two (or 6) focused on purchasing the securities of insurance company’s I have turned my focus to utility issues where the most recent drop in prices have helped highlight some darned good values. Of course with some interest rate hikes ahead by the Fed we know that we may well get better prices in the months ahead.
We have our master list of utility issues here. I do not include the $50 and $100 issues on this list and we know there are some of long time comment contributors who dabble in this area–but they are relatively illiquid, but may present an opportunity for someone who is patient–or the master of illiquids–Gridbird.
I am looking at the Spire 5.90% preferred (SR-A), the Nisource 6.50% fixed to floating (NI-B) and the CMS Energy 4.20% perpetual (CMS-C). All of these are at least split investment grade and have current yields over 6%. I already have modest positions in these–but am looking to add more now (or soon).
Additionally we are getting a lot of baby bonds from utilities with current yields in the 5.75% area which are tempting.
NOTE–Pacific Gas and Electric (PCG) and Southern California Edison (SCE) Trust preferreds have special issues and investors should do heavy due diligence to make sure you fully understand those particular issues.