Emera Inc (EMA.TO)

Fortis or Emera or Algonquin for dividend income, with increases? Fortis. Fortis is a good price in these ranges, history of increasing dividend, good diversified portfolio. Market has overreacted to rising interest rates, and Fortis has been caught in this. Fortis has had a better growth rate than the others, and an excellent reputation.

When a company pays a dividend out and the stock drops by that much, then it is not a move. This stock is quite cheap. These utilities tend to find their lows as the market is finding its highs. He thinks this is probably a pretty good place to be.

Utilities in general are cyclical and linked highly to interest rates. We don’t have to worry too much about yields going too high. But he does not see much scope for growth in the stock for two years. ZWU-T would add some diversification while leaving you exposed to this sector. Both tickers are similar on a chart.

He likes it. It is well run. There are concerns around their balance sheet but feels they will get back to target ratios in the future.

This company had a big acquisition in the US and has a major project along the eastern seaboard into the US. The market is starting to question their dividend growth guidance. Overall, he looks to add to his holdings in the utility space ahead of the next recession in the next 2-3 years. You might see them get a little cheaper first, especially if it trades below $40 again.

He likes the utility space, given we are in the late-rate cycle. Emera is one of the more solid utilities. Valuations are attractive for an entry point. However, these stocks are at risk if interest rates rise quickly.

The group is out of favour, like anything interest-rate related. They're down 15% YTD, so it's a decent entry point now. Rates will likely slowly rise, so buy a company with some growth. Under $40, EMA is a good long-term entry point. Be patient and collect your dividend.

He likes it. Has pulled back and the valuation looks very attractive now. Cleaning up some of its assets.

It is down 20% from the top and it is attributed to interest rates. His play in this space is NPI-T. He wants the diversification outside of Canada.

SU-T vs. EMA-T. EMA-T has a higher dividend. He thinks there is more capital appreciation potential with SU-T, however.

This is best known for its legacy business of Nova Scotia Power. Today, it is now an international utility operator with over 80% of revenue coming from outside Canada. A weakness lies with a dropping ROE from 14% to only 9% -- meaning bigger is not always better. He expects to see a moderation in the growth of the dividend. A credit agency put them on watch in December. This is a reasonable entry. Yield 5.5%. (Analysts’ price target is $49 )

He finds decent value in the utility space now. This is a stable business. Rising rates can continue to weigh on this stock, but much of that has already been priced in. This is a high-quality business that will continue to grind out cash. It has growth opportunities in Florida and elsewhere.

People buy this stock for safety. Normally this stock has very low volatility but it has dropped sharply. There is a price/volume divergence: volume is shooting up while the price is dropping. He thinks he is seeing panic sellers and value buyers. There is nice support at $39. With a 5.5% yield, there will be good income, but he doesn’t expect a quick recovery. This is significantly risky at this time.

A lot of Canadians have been shocked by the drop. They are interest sensitive. They also hold a lot of debt. It is a great company with a solid dividend. Wait until rate rises slack off a bit.

He is interested in the name. 41 – 42 level seems pretty good. We could have a little bit of a drop from here to the 37 level. He believes that the market will be able to handle higher interest rates. If there is an acceleration in interest rates you probable don’t want to own it.