Investing In Gas Stocks With Top-Dollar Ted

Gas company stocks have been strong during recent years for a variety of reasons, including new technologies, environmental advantages, and increased competition within the industry. The Edward D. Jones and Co. Gas Distribution Average rose from 29.731 at the end of 1984 to 58.427 at the end of Sept...

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Bibliographic Details
Published in:Public utilities fortnightly (1994) 1989-10, Vol.124 (9), p.41
Main Authors: Burkhardt, Daniel A, Mosbacher, Merry L
Format: Magazinearticle
Language:English
Subjects:
Dow Jones averages
Earnings per share
Institutional investments
Investments
Manycompanies
Natural gas industry
Natural gas utilities
Portfolio performance
Public utilities
Revenue
Securities analysis
Statistical data
Stock prices
Stocks
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Summary:Gas company stocks have been strong during recent years for a variety of reasons, including new technologies, environmental advantages, and increased competition within the industry. The Edward D. Jones and Co. Gas Distribution Average rose from 29.731 at the end of 1984 to 58.427 at the end of September 1989, a price gain of 96.5%, compared with 122.3% for the Dow Jones Industrial Average during the same period. An analysis of a potential investment in the natural gas industry during this period showed that market timing is not critical to achieving an above-average return. Rather, investors should focus their investment strategies on maintaining a diversified portfolio and systematically making additional purchases. In addition, by selecting stocks that pay good dividends and then reinvesting those dividends into more shares, investors can reduce their exposure to declines in stock prices and lock in certain minimum returns. Gas utility stocks clearly offer investors attractive investment alternatives under this scenario. According to Energy Performance Review, 2nd-quarter 1989 earnings before "special items" for 40 major gas distributors were up 22% over the same period in 1988.
ISSN:1078-5892
1945-2578