Newsletter issue
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Newsletter issue
A ready-made layout for a weekly members-only issue of an investment or industry newsletter. It opens with the issue number and a short summary, moves through market notes, presents one featured idea with a key-numbers table and the case for and against, lists this week's portfolio changes in a second table and signs off with a disclaimer. Copy the page for each new issue, replace the figures and commentary, and keep the structure so readers always know where to look.
Issue 362: Boring is beautiful
Rates held, tech wobbled and utilities had their best week since spring. This week: why a sleepy water company is our new idea, and one trim in the model portfolio.
- The Fed kept rates where they were and hinted at one cut before year-end.
- New idea: Hollins Water Utilities, a 3.4% yield with 21 years of raises.
- Portfolio: trim Carver Industrial to a half position; no other changes.
Market notes
The market took Wednesday's rate decision calmly, but under the surface money moved. The S&P 500 finished the week down 0.6%, while the utilities sector gained 2.9% and consumer staples 1.4%. That is the pattern we tend to see when investors start to expect lower rates: steady payers become more attractive next to bonds.
I would not read too much into one week. What matters more for us is that dividend growth across the S&P 500 is running at about 6% this year, roughly in line with its long-run average. Companies are still raising payouts; they are just doing it more carefully.
What I am watching
- Bank earnings next week. Loan losses are creeping up. Our two bank holdings have plenty of reserves, but I will report on both.
- REIT refinancing. Several office landlords face large debt maturities in 2027. We own none, and this is why.
This week's idea: Hollins Water Utilities
Water is about as dull as investing gets, and that is the point. Hollins supplies water and wastewater service to 1.2 million customers in seven states, almost all under regulated rates that let it earn a steady return on what it invests in pipes and plants.
| Key number | Hollins | Sector average |
|---|---|---|
| Share price | $58.20 | - |
| Dividend yield | 3.4% | 3.1% |
| Years of dividend raises | 21 | 11 |
| Payout ratio (of earnings) | 61% | 68% |
| 5-year dividend growth, per year | 7.2% | 5.0% |
| Net debt to EBITDA | 4.9x | 5.6x |
| Price to earnings | 18.1x | 19.4x |
The case for
- Regulated income that barely moves with the economy
- A $3.1 billion pipe replacement plan that grows the rate base about 8% a year
- Lower debt and a lower payout than most peers
The risks
- Rate cases can go against it, as one did in 2024
- Heavy spending means it will need to borrow
- Rising bond yields would weigh on the share price
The verdict: we add Hollins to the model portfolio as a full position, with a buy-up-to price of $62. Expect a total return of about 9% a year from here: the 3.4% yield plus dividend growth of 5% to 6%. Not exciting, but very dependable.
Portfolio changes
| Holding | Action | Buy-up-to | Why |
|---|---|---|---|
| Hollins Water Utilities | New, full position | $62.00 | See this week's idea above. |
| Carver Industrial | Trim to half | $84.00 | Up 38% this year; yield now just 1.9%. Take some profit. |
| Ridgeline Bancorp | Hold | $41.50 | Results next week. No change until then. |
The full portfolio, with every buy-up-to price, is on the model portfolio page. The monthly review is on the first Monday of next month.
The best dividend is the one that is still being paid, and raised, ten years from now.
Thanks for reading. Reply to this email or write to hello@example.com with questions; I answer a few every week in the mailbag.
Sample content. Hollins Water Utilities, Carver Industrial and Ridgeline Bancorp are fictional companies, and the figures are for illustration only. The Dividend Ledger publishes general research and education, not personal investment advice. Consider your own circumstances, or speak to a licensed adviser, before investing. Past performance does not guarantee future results.
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