Capital Power (CPX.TO)

All utilities had a big selloff when rates were rising in 2022 and 2023. Then, as interest rates went nowhere, so did the stocks, just collecting the dividend. BOC has cut twice, Fed is probably going to start. Utilities have come up off lows, but haven't started to move up yet.

This one has been starting to pick up. 

Was in a downtrend. Now breaking that and making new highs and lows, all good. Now you start looking at next levels, somewhere around $45, and it's pretty close to that right now. If that gets taken out, you could see $50 or so.

Pays you a very competitive income stream, yielding about 5%. Canadian dividend tax credit. Servicing energy industry, so it fits into the long-term themes. Expects some growth in dividends. The kind of play you want to make as part of the nat gas transition and less-green-for-longer transition.

The 5th-largest independent power producer in North America, deriving 50/50 of EBITDA from Canada and the US. They play into the theme of energy transition that will last decades. Growth is good, by buying American companies. They have 3 natural gas facilities from Alberta; NG will be the main energy that will transition us from traditional energy to renewables. Also, power centres connected to AI have been approaching CPX as a potential partner. Lower interest rates help.

Bit volatile, but sees upside. Very attractive value score of 9/10. Expects stock to rally as interests rates ease. Beat latest EPS. Up YTD 13%. Growth opportunities within the business model. Great dividend yield of almost 6%.

Fits into defensive thesis. Current valuation very low - great time to buy. Demand for stable electricity very high. Reliable dividend rate (~6%) is good for yield investors. New A.I. data centers will ensure demand for product. Good for long term investors. Strong management team. Business will be benefited with falling interest rates. 

Doesn't own stock. Would prefer company with better diversification in assets. However, strong business with good assets. Could be a good portion of business. 

Unloaded it, as growth rate is negative. Power prices have come down, costs have gone up. Going to get paid your dividend, with 6% growth. Not bad PE at 13.1x. Trying to get into data centres. He prefers ALA or GEI. EMA is a comparable utility with better growth and price to growth.

Likes recent US acquisitions. Excited about the power business because of AI. A lot more power will be demanded on the grid. Undervalued, time to buy. Yield is 6.5%, with plans to increase 5-6% over next couple of years. 

Lot more upside left.

It's the interest-rate sensitivity of it all. Utility names have all gone down aggressively, even his go-to names of BIP.UN and FTS. He prefers the growth profile of those 2, but nothing wrong with CPX. All are very undervalued, but strong dividend yields, so attractive for people looking for income.

It's a 315-basis point reset preferred, meaning a 315 point spread over whatever the Bank of Canada 5-year yield is then. Is a long-duration reset, resetting every 5 years. Pays a nice yield and like this company, but is a utility, a sector currently out of favour until interest rates decline. Good for the dividend, but a shorter reset period would be better.