Rebecca TeltscherFortis Inc.FTS.TOBUYFeb 05, 2024

Bond proxy. Low beta. 100% regulated (the governing body works backwards from the numbers to set what FTS can charge to, essentially, meet those numbers). His firm might be a bit early moving into these low-beta bond proxies, but they see tough earnings comparisons coming up for the broad market. Last decade has seen double-digit total shareholder return. 

Not much business risk, no commodity risk, no technological obsolescence. Important:  It's a low (or negative) correlation to 2/3 of the other names in the portfolio. That makes the portfolio more robust, and is a very appealing addition to a portfolio. Yield is 3.38%, which grows 4-6% compounded.

Another of the high-divided, but low-dividend-growth, payers. Excellent dividend grower, in that they've grown it every year forever. But it's ~5% growth on a 3.3% dividend. Utilities as a group haven't performed relatively well. Probably the best in the group.

Trending higher. Relative to holding a bond, you'll probably be OK. But you won't get a market return.

Categorized as a utility, not energy. The group has taken it on the chin over the last 2 weeks -- seeing signs of a trend break. Likes these names longer term. He doesn't mind nibbling here, but is a bit worried. More correction coming. Next big, important support level is $72.50-73. He'd use weakness to add there.

A sleep at night stock. If you get 12% a year compounded, you'll be happy. The dividend will grow each year. Good management. GOod to buy this 5-6% like now. Don't expect 30-40% returns, but this will be an anchor in your portfolio.

A core income stock for her, paying a 3.3% dividend yield which they've increase the past 52 years. FTS thinks it can grow its free cash flow 4-6% through 2030. Utilities benefit from the data centre build. Good to buy now after a pullback.

Favourite utility name. Rate base growth continues at 5-7%. The only thing stopping her from buying now is valuation. Paying 18x PE for only 5-7% growth. Might consider adding in the low $70s. One of the best utilities with the best management in the world. One you want to own forever. Yield is ~3.2%.

A great name, but like the banks, its dividend has fallen a lot. Growth is merely okay.

If you want to be tactical, look for a bit better of an entry point. Really good company. Decent yield, pretty safe. Fairly valued, so doesn't see tremendous upside. Fine to buy-and-forget, as it'll grow into its valuation over time and do well. 

If there's some upset in the market (he's not saying there will be), everyone's going to cram into utilities -- they're the opposite end of the coin from something that's more growth-oriented.

But in a choice between this name and EMA, he'd pick EMA for more upside.

A solid utility that pays a good dividend. Great for income and has fine growth. Will do well in bear markets. They also benefit from data centre builds.

One of the largest regulated gas and electric utilities in NA. Q4 earnings beat by ~6%, revenue up 11% YOY. Massive $26B capital plan through 2029 to grow rate base by 6.5% compounding. Not exciting, but reliable.

Dividend of 2.3% still solid, grows each year. Bond proxy, not growth story. 22x forward PE for mid-single-digit growth. Near 52-week high. 8/10 on fundamentals.

If you own it for the dividend or to sleep at night, you can continue to hold. She took profits and moved on. To buy in, wait for a pullback (at least under $70).

She prefers an infrastructure play such as BIP.UN.

It is their core utility holding. The dividend is 3 1/2% and it can increase that 4 to 6% to 2030.  It is growing its capital spending plan to support its ability to increase its dividend. There is visibility in cash flow. Sixty per cent of its earnings come from the US and they are in regions where data centres are being built and it has the potential to increase its power contracts. It is a well positioned company and is great as a long term income stock.
Buy 6  Hold 7  Sell 4 

Loves the space. Trading ~18x PE. Not crazy, but higher than historical norms. So she's buying AQN instead.

If you bought in April around $55 and today it's trading ~$72, that's about 10+%. Plus you get a 3-4% dividend yield, with 3-4% dividend growth. Pretty good for a regulated utility, and he's happy to own a company that puts out high-single or low-double digit returns sustainably every year. There aren't many companies more durable than this one.

Lots of growth ahead, but it won't be 20% a year. He'd rather have 8-10% total return a year for 20 years than 20% for 3 years (and after that who knows what happens?). Shows what the expectations are out there, everyone's looking for bigger pops.

Likes the company, but there's little growth. Prefers something diversified like ZWU-T. Would be interested if shares fall below $63.

Likes the regulated utilities.