Algonquin Power & Utilities Corp (AQN.TO)

This company has a lot of their operations in the US, probably 60%-70%. If bond yields go up, investors in this will question why they are in it and would look at moving out. The chart shows a long upward move, but there has been a correction taking place since mid year. Because bond proxies tend not to do well in January, he would wait a little longer.

Had sold his holdings, and has recently stepped back into this name. Looking at utilities and telcos, anything that is interest sensitive has recently had a selloff. In its group, this is the top of class in terms of cash flow and EPS growth. They are also somewhat diversified. Dividend yield of 4.97%. (Analysts’ price target is $14.20.)

A great company. They have great growth, modelling 15% EPS over the next couple of years. A lot of their assets are in the US. Empire is on track to close, which is accretive to them. Q3 was in line. This shouldn’t be too impacted by Trump policies. In a rising bond yield environment, maybe you shouldn’t pay 19X, maybe 17 or 18. You could sell some Puts to get it at a lower level. Dividend yield of 5.1%.

(Market Call Minute.) This has good acquisitions, and continues to grow in the US.

He loves the alternative energy space. Over time we are going to have less carbon, and we are not going back to coal fired plants and dirty energy. The world is aiming to get cleaner. A company like this, that focuses on renewables, should do very well in the very long run. Looking at earnings and the multiple, it is a little bit expensive. At the current price, it looks very attractive. He would nibble away at this.

He likes utilities in general and he really likes this stock. Has a low ROC, but it is reliable. The dividend is fairly safe.

Fortis (FTS-T) or Algonquin Power (AQN-T)? This is a good time to invest in either. Sharp interest rate increases are a risk, but she doesn’t expect that. In a rising rate environment, you want to buy companies that have the ability to increase their dividends, and hopefully their yields will also increase over time. Fortis would be her preference.

5.4% dividend yield. The trend has been up, not bad. The sector is out of favour for the next few months. It has started a short term downtrend, but it had done that last winter as well. Hold if you are a yield investor, but as a capital gains investor you should sell it and move on.

This company was really happy with the results of the election, because they had just bought a company in Missouri. The benefits to them will be switching from coal to natural gas, and also getting wind power assets with a lower tax rate, and being able to convert the US$ back to Canadian to pay off shareholders. Shareholders are probably going to get a nice bump every year on their dividend, probably in the 10% range. As a dividend grows, the share price often follows.

This has performed quite well, and sees it probably in the $12.50 range, maybe to $13. This has been diversifying itself amongst renewable assets, cogent facilities, natural gas powered assets, etc. so it is basically a utility. It has shown growth rates that most utilities have not. His only concern is that they have done acquisitions in the US. Whenever a Canadian company buys US assets, he gets a little nervous because those assets have obviously been seen by 100 US companies. For them to win the deal, they would have had to pay a higher price. If looking for exposure to power, he would look at Capital Power (CPX-T) which has been beaten up and is paying a 7% yield.

Utility and Growth. Their acquisition looks pretty good. You can see a couple of dollars up and a 5‘ish yield. You should beat the market and the group.

Good company, done well, pays a good dividend. It is getting to be a crowded market. You pay a lot for it. It is too expensive right now.

Recently added this to his portfolio. Similar to Emera (EMA-T) or Fortis (FTS-T), it is in the power/utility space. Pays a yield of about 4.7%. They bought some assets in the US, so are diversifying their asset base a little. One thing with these defensive plays that are more yield oriented, the fear of interest rates has kind of gone up in the US, and stocks have come down a little. He can see 20% upside growth in this name.

(A Top Pick Jan 21/16. Up 12.07%.) At the time this was trading below its five-year average and below its peers. He chose it for its US exposure and its solid dividend. He saw good growth in EPS, and still sees that for the next couple of years. There is still much left to go. Trading at 23X 2016 earnings, but trading at 18X 2017. Dividend yield of 4.8%.

He sees pretty visible EPS growth of 18% this year and next from new projects and higher rate cases. Sees 8% annual dividend growth over the next couple of years. Their balance sheet is improving. It looks like the Empire deal is going to close sooner and it has a very strong US$ tailwind. Not expensive on a 2017 basis, and not expensive relative to its peers. Dividend yield of 4.77%.