Sizable gains return to the market.
Scott Barclay is an analyst in the energy research division of SNL Financial.
With an average appreciation of 18.9 percent since we last ran SNL Financial’s dividend data (Fortnightly, April 1, 2003), SNL’s safe dividend picks appeared to do well for any market. However, like the fine golden years of the late ’90s for all things technology, recent months have returned sizable gains to investors of energy stocks—not what one would expect from slow growth, dividend-paying electric and gas utilities that make up the majority of the SNL Energy universe.
Such appreciation doesn't necessarily reflect new economic value-although results have improved, and the weather earlier this year helped-but simply a market correction. Stock prices were glum after the barrage of events in the months preceding our first analysis: Enron imploded, California exploded, spark spreads vanished, and debt rating downgrades became more common than energy executives looking for work.