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Author: MandBinc Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35397  
Subject: Utilities and Interest rates Date: 11/18/1999 2:47 PM
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Utilities tend to act very much like bonds as they decline in price and increase in dividend yield; as interest rates go up. OLD RULES MAY NO LONGER APPLY!!!

Utilities are now pretty much deregulated and fall into basically 3 categories. Producers, Transporters and Distributors. What Utilities - meaning mostly Electric but also Gas and Telephone, will finally look like when all the dust settles is not easy to determine.

The TELCOs have had stupendous growth, mostly, since the breakup of AT&T back in 1984 but as a rule their dividends have not kept up with their share splits. Their focus is currently on growth.

The big power generators were recently tripping over each other buying up Utilities in Great Britain. How safe their dividends are now, or in the future, is Questionable. UNS is a big utility that had to file for Bankruptcy some years back and has not paid a dividend since. The current share price is the result of a 5:1 reverse split some years back.

Of course there is also GPU. That stock went down to the low single digits, after Three Mile Island, and stopped paying a dividend for years then came back like an express train.

Stocks do not always go up. There are Bear Markets out there and eventually the Ursa will return to claim the land as their own. The Bovine will do what Bovine always do, stampede for the horizon, leaving many of their friends behind - trampled under hoof. These wise Ursa will feast upon the abandoned, as they do the Salmon in season, then return to their dens for a short winter's respite.

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