Capital Power (CPX.TO)

Depends whether you're a dividend investor. If you are, and you want dividends that grow over time, this name is one to look at. Doesn't anticipate dividend cut. Well run. Challenge is that utilities have become a second-derivative play on data centres. Quality name.

Disclosure:  Owns the bonds, but not the equity.

We need more electricity and CPX has it. They completed a big coal-gas conversion plant in Alberta, and next to it 20,000 acres. They have excess power. They bought some US companies, older gas plants, which are enjoying demand.

Ran up last September/October on expectations of a data centre deal in Alberta, but didn't come about. The big deal went to PPL. (Don't put all your eggs in one basket!)

Diversifying into the US. Good company, but not that much growth compared to some of the other names.

CPX & AI is a story that reflects aspirations more than reality. It is the future and we will see it. Not sure that AI and data centres will be as robust as current expectations. Likes it. 

He'd be a buyer here, but prefers ALA.

It takes time to build data centres, but remains a need for them and power. CPX has positioned themselves them in this demand. Valuation is good and are growing above average. They pay a nice dividend.

Focuses on selling electricity into the open market, rather than having contracts. Upside if there are electricity shortages. But in utilities, he looks for fully contracted revenues and predictable, long-term cashflows.

No real concerns. Probably good long-term hold. Predominantly nat gas with a bit of renewable energy. Half its business now in the dynamically growing, data-centre focused US. 

Trades ~27x PE, premium to historical norms. Compound return over last 10 years is an impressive 21%. Chart looks good, management is pretty good. Yield is ~4%, with good cadence of dividend growth.

He prefers another name.

Utility sector is starting to slowly matter again. Getting attention because power demand is growing, especially in US with AI and data centres.

She invests selectively in the space, and this is a name to own.

Likes the business. Yield is pretty good. One issue management sees is that Alberta government has to get its act together for data centre projects to come to fruition. (He curls with an AI consultant who said that everyone's going to Texas:  land, nat gas, minimal regulations.)

Has projects in US. Power demand will skyrocket no matter where AI is situated.

Recent earnings were in line. Great acquisition in Pennsylvania last year, which is getting increased prices. Front-and-centre for Alberta data centres. Trades at 8.5x forward operating cashflow. Good, safe utility play in growing areas.

Has done well because demand for power has shot through the roof, so its assets have been revalued significantly higher. Very well managed. Surplus of power, and chances are low this year that that excess will be released. Has opportunities in US to transition from coal to nat gas. 

If you're focused on Canada, he'd be a buyer today as a derivative AI play. But his preference to play AI would be MSFT with a little bit of ORCL.

If you want dividends, look at Canadian pipelines rather than this. CPX is a play on AI centre growth in Alberta, which is great. He owns ALA instead.