Emera Inc (EMA.TO)

Has done very nicely over the last year. This is an interest rate play. If interest rates start to move up there will be a pullback, but for the moment this is a very solid, steady, slow grower, and you are probably looking at an 8%-10% total return of which about half is the dividend. A very solid thing to buy.

An interesting utility with a nice yield to it. It is doing things that are sort of outside the box. They are looking at cables from the new development up in Labrador, to bring Hydro down. Have got the offshore gas that comes in from Nova Scotia. He didn’t buy this because he just couldn’t find enough growth. His model says they need 10% growth with the yield and he hasn’t seen this. It has the potential to get some growth.

Sold his holdings late last year. Operationally this is a great business. Good management team. Going through a $4.5 billion CapX program in the Maritimes. There is value here for a business that is trading 17X, and where he thinks earnings will grow in the mid to high single-digit. It seems a little rich to him. He would be looking to buy this in the low $30s if you could get it.

Hasn’t really done much, but you could say that for most utility stocks. Good company. Dividend is covered. You are not getting exciting performance out of this. Still hasn’t recovered from the “taper tantrum” levels. He likes the stock, but can find higher yielding utilities.

Not his favourite in the group. Nothing wrong with the company, but this is a yield play without a lot of growth. Inevitably rates are going to go higher, not until next year, but if you have something growing only 3%-4%, it is not enough to lean into the fact that rates probably start to go up. You’ll get a flattish return, which is not going to really hurt you, but sideways is what you are probably going to get.

This is all about a Northeast energy link. They are taking power from a big Hydro energy on the mainland, across Newfoundland, down to Nova Scotia, and then potentially down the Eastern seaboard of the US. In the meantime, there is some exposure to rising interest rates, and there is a possibility they may have to issue some equity to keep building this project. This is more of a 2016-2017 timeframe.

He prefers Enbridge (ENB-T), Fortis (FTS-T) and TransCanada (TRP-T) in the utilities space. Likes the company and it has a nice dividend of 4.3%. For a long time it was just a boring old Nova Scotia utility, but it is starting to grow and become a bit more entrepreneurial. Their capital expenditure to link the lower Churchill Falls expansion, will eventually pay off, but that is 5 years into the future. You can expect 3%-5% earnings growth plus the dividends. Would be more attractive if it got significantly cheaper.

A major East Coast utility with a reasonable yield. On the other hand, he doesn’t see that much growth. If you own, you should Sell and look at other opportunities. Thinks utilities are fully priced.

Thinks the stock is headed up, but doesn’t think it is a Strong Buy at the moment. There should be dividend increases over the next couple of years.

He doesn’t like the group and doesn’t own any of them. They are interest sensitive and you don’t have any growth.

Feels the story is solid and they have some decent growth prospects ahead. Have the lower Churchill Falls project, and everything that goes along with that. Targeting earnings growth in the 4%-6% range. Stock has pulled off a little bit here, partly in tandem with interest sensitive names. There was a little bit of noise on politics going on in Nova Scotia, but were able to manage through that reasonably well. Doesn’t see a ton of downside. Risk in some of these large utility names is that a growth of 4%-6% is a little bit lower than what you are going to find in the rest of the market. If we do get into a rising interest rate environment, they are not going to be able to keep up with rest of the market. However, for a conservative portfolio this not going to hurt you.

Well managed company. Will increase their dividend 0 to 5%. Had a big project going on in Labrador and into Newfoundland. That will take up a lot of money. You will get dividend increases, but you will also get share issues for the next 3-5 years as well. Good yielder. There will probably be a lid on the stock because of share issuance as their project progresses.

(Market Call Minute.) Good and solid. Have gone up with their dividends forever. He is sure you will have a recovery on this one.

Everyone loves utility dividends. We will not see a stress in the interest rate areas. New money could go into this one to half a position. It won’t take off though.

Got whacked with the Fed announcements on interest rates. But their dividend is a steady eddie stock where they regularly increase the dividend. They have growth projects. It won’t be the stellar performer it was because they are doing all the investing.