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Wow talk about sector rotation: large utilities fall and oil surges, smaller utilities do well.
The market:
- D: down 1.5%
- SRE: down 3%
- MDU: up 1.6%
- BKH: up 1.5%
- OXY: up 10%
- OAS: up 2%
- XOM: up 3.45%
- NOG: up 8%
- CVX: up 3.7%
- COP: up 7%
- PSX: up 7.2%
- ENB: up 1.5%
- EPD: up 3.3%
Top utility stocks for December, 2020: Investopedia. Several categories.
- for "best value utilities": NRG Energy, Sempra Energy, and Vistra.
- best overall (value, growth, and momentum): NRG, VST and PCG (PG&E).
- Duke and Dominion not on any of the lists.
EPD: no dividend problems here. Motley Fool.
That actually what brings us to the big concern here. After a long period of regular quarterly increases, Enterprise has chosen not to increase the distribution over the last four quarterly payments. The obvious driver of that choice was the steep drop in energy demand driven by efforts to slow the spread of the coronavirus. These two factors combined have investors worried, leaving the unit price low and the distribution yield high. That's an opportunity for more intrepid investors that are willing to dig into the numbers a bit.
To get the biggest concern out of the way upfront, Enterprise was able to cover its distribution by a robust 1.7 times in the third quarter. Coverage over the first nine months of 2020 was an impressive 1.6 times. Historically, 1.2 times was considered strong coverage in the midstream sector. In other words, there's material room for adversity here before a distribution cut seems likely.
That said, Enterprise's business appears to be holding up pretty well given the circumstances. Yes, revenue was lower by around 12% year-over-year in the third quarter. But cost containment efforts and reduced interest expenses, among other things, helped to keep distributable cash flow roughly flat year-over-year in the three-month span. The world's a rough place right now, but Enterprise is muddling through just fine.
Ford: the ICE is dead. Long live the ICE! Over at Fox News:
In the spirit of monster movies, Ford is working on a sequel to its “Godzilla” engine.
The appropriately nicknamed 7.3-liter V8 debuted on the 2020 F-Series Super Duty pickup but is also available for purchase as an a la carte crate engine for racing and custom car applications priced at $8,150.
In stock form, the iron-block, pushrod motor is rated at 430 hp and 475 lb-ft of torque, but tuners have already cranked it up to over 700 hp without even having to use a supercharger.
Ford is clearly aware of the powerplant’s potential – and the potential profits it can make by selling an even more potent version of it.
Ford Performance Product Manager Mike Goodwin recently told the Performance Racing Industry news outlet that his division is working on a “super-secret project” it calls the “Megazilla” that will be more powerful than the current mill.
He didn’t provide any details about how Ford plans to achieve that, but Fiat Chrysler’s Mopar division has set a high bar for large-displacement crate engines with its 1,000 hp supercharged 7.0-liter “Hellephant” HEMI V8.
I assume Elon Musk is watching.
A reader noted: https://www.foxbusiness.com/politics/obama-criticizes-americans-for-liking-cheap-gas-and-big-cars-more-than-the-environment.
See first comment:
Nothing drives like 2 tons of Detroit iron being pushed by 400+ cubic inch of a cast iron pushrod V8. :-). Poor Obama is probably annoyed by this.
ReplyDeletehttps://www.foxbusiness.com/politics/obama-criticizes-americans-for-liking-cheap-gas-and-big-cars-more-than-the-environment
Agree completely. LOL. That is so funny the way you put that .. two tons of iron being pushed by 400+ cubic inches of cast iron ... reminds me of a great Debbie Harry / Blondie song: Detroit 442.
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