Hi DefinedBenefit0Nothing wrong with diversification if the...

Hi DefinedBenefit0
Nothing wrong with diversification if the numbers are good.
Banks and Supermarkets do not own their stores because the return on capital from owning bricks and mortar were lower than the return from retail banking.
With WPL, investing in infrastructure at North West will be dependent on the return on capial comp ared to long term conventional investment in oil and gas, of which the long term dynamics are definitely changing.
Diversification has worked well for conglomerates like Wesfarmers and BHP.
BHP is one of the only mining companies that has oil snd gas assets.
Its oil and gas assets have a higher asset value than WPL. However, BHP to date has not spun out its oil and gas assets into a separate listed entity because of diversification and minimising loss of income from fluctuating commodity prices from a single commodity. It is the same principle where financial advisors say to not put all your money into one share company but to diversify.
diversification is good if the return on capital is good and WPL has a competitive advantage which it has on the north west infrastructure because it is the manager and part owner of this infrastructure