It was back in 2007 that I first began reading studies from Rocky Mountain Institute co-founder Amory Lovins. Lovins was well ahead of the energy curve and argued that the strongest voice for getting off oil was also the world’s biggest buyer of oil, as well as of renewable energy — the Pentagon.
Today, seven years later, the Pentagon is still the world’s single largest consumer (excluding countries) of energy.
Hawaii Business reports that the Pentagon today is investing billions in alternative energy and conservation. In 2011, the U.S. Department of Defense spent $6.5 billion in Hawaii alone.
CacheValleyDaily.com notes that almost every branch of the military is moving away from dirty fuels like oil and gas, and moving toward cleaner fuels. A goal of the Air Force and Navy is to increase over just the next few years the use of biofuels to produce 50% of the fuel needs for ships and planes.
Here are five winning ways to play into energy as we kiss 2014 goodbye:
TC Pipelines, LP (TCP)
In November, TransCanada Pipelines agreed to sell its 30% interest in Gas Transmission Northwest Pipeline to TC Pipelines, LP (TCP). TC Pipelines already owns the other 70%.
With little extra effort, TC Pipelines will increase its cash flow. If the deal goes through, which is likely, it’s a good bet that TC Pipelines will be increasing its distributions as a result.
My price chart for TC Pipelines shows a bullish pop in shares. Buy TCP stock.
Duke Energy Corp (DUK)
Buying utilities like Duke Energy Corp (DUK) is one way to set your portfolio up for a steady stream of dividends.
Duke has paid quarterly cash dividends for 88 years straight and has increased dividends each year since 2007.
My price chart shows a powerful breakout for Duke, but DUK share prices still haven’t reached their all-time highs. Buy DUK stock.
Air Products & Chemicals, Inc. (ADP)
As I’m writing, NASA’s Orion deep space capsule is being picked up in the Pacific Ocean after a successful test and splash-down. Powering the Delta IV Heavy rocket that pushed the Orion capsule up to 3,604.2 miles from Earth was a massive amount of liquid hydrogen, with massive amounts of inert helium greasing the works. Those industrial gasses were supplied by Air Products & Chemicals, Inc. (ADP).
Air Products has supplied NASA with fuel for over 50 years and will help NASA put a man on Mars. Air Products has had a strong relative performance compared to the S&P 500 over the last two years. Buy ADP shares today.
Southern Co (SO)
As the premier energy company serving the U.S. southeast, Southern Co (SO) supplies 4.4 million customers using nearly 46,000 megawatts of generating capacity. Southern owns regulated electric utilities in four states and an eight-state unregulated electricity generation business.
My relative strength chart shows Southern Co flat on its back compared to the S&P 500. Buy SO stock.
Kinder Morgan Inc (KMI)
The merger of Kinder Morgan Energy Partners into Kinder Morgan (KMI) is finally complete. There are significant benefits possible from the merger, including higher payouts to KMI shareholders.
KMI stock’s current yield is 4.4%, and Kinder Morgan management has noted that it plans on raising the dividend aggressively. The board has already announced a 16% increase in the dividend for 2015 to $2 per share, compared to $1.72 in 2014. KMI also intends to increase its dividend by 10% annually until 2020, about double the dividend growth of the past.
My price chart shows a bullish pop in Kinder Morgan shares. Buy KMI today.
To get the rest of Dick Young’s top stocks to buy this month for stability and long-term dividend growth, sign up for his newsletter, Intelligence Report.
