Fortis Inc. (FTS.TO)

They're raising $500 million to fund their growth projects; they don't have enough capital growth to fund them. They get into a cycle: they increase their dividends to drive the stock price higher, make acquisitions, then buy more stock, then increase their dividends and so on. It makes it look like things are working out, like Enbridge. They're highly levered. They're not sufficiently funding their business. They sell more stock, but then they have to pay more dividends. If interest rates take a big hike, dividend stocks like this will be a disaster.

He owns both Fortis and Emera. They are attractive, stable, dividend payers with similar drivers. He slightly prefers Fortis.

(A Top Pick April 12/17 - Down 4.4%) Has come off along with all the other interest rate sensitive stocks. She thinks it is overdone here. She would be buying here. Electric utility company. 60% of its earnings come from US regulated. Very stable cash flow streams. Yield of over 4%.

A core holding. Diversified geographically across Canada and the U.S. across different jurisdictions. Rate-based growth of 5% for the next 3-4 years and dividend growth at 6%, plus half-billion-dollar projects which are added gravy. (Analysts' price target is $47.22)

Shares have been under pressure, as has anything interest-rate sensitive, over the past few months. Fortis is different from the pipelines and other energy-focused stocks because it is an all-contracted utility. However, continuing raises in interest rates will keep putting Fortis under pressure. There is nothing wrong with Fortis but it is not yet cheap enough. For dividend stocks, he prefers something like Enbridge and Inter Pipeline.

(A Top Pick Feb. 1/17, Up 6%) Part of the rising interest rate environment. US tax reform will hurt Fortis for the short term, but long term, Fortis will do well. Continues to like it at these levels. Selling at just over book value and it's highly profitable. Won't be a serious downside from here. In an uncertain world, is a good name to hold. You're paid to wait. 4% dividend.

Is this a buying opportunity? He thinks a lot of people would say so. Many of the utilities have been punished with the higher interest rates unnecessary. There is still always the pressure if interest rates continue to move up.

(A Top Pick February 17, 2017. Down 2.63%). It pays an attractive yield, over 4%. Pulled back because of rising bond yields. She still likes it and still owns it as an income stock. It offers a stable cash flow. They are growing in Canada and the US and expect to increase their dividend 6% every year into 2021.

In the same class as Emera, squared. Fortis has increased dividend 46 years in a row. Dividend growers do the best over time. Can safely own both Fortis and Emera.

Dividend will go up as more projects go online. Valuation is reasonable at 16x, despite a fear of rising interest rated. Strong fundmantals. All its energy is contracted or regulated. Comfortable to own this.

Utility names, and interest-sensitive stocks generally, including Telcos, have been under pressure. If you own it, there is no rush to sell it. He prefers Algonquin Power (AQN-T) and Emera (EMA-T) because they have good growth profiles and that will give them better ability to raise their dividend.

This strong broke its uptrend. An uptrend usually shows higher highs and higher lows. This stock has broken its lows and is selling below the trendline. It has probably broken the 200-day moving average.

This will give you pressure from rising interest rates, and it will be difficult for these companies to raise their dividends at the rate they have been. The regulated side of the business is going to be told how much they are allowed to earn. A lot of Cdn utilities were buying US assets, which is going to be a bit of a boon for them over time. Canadian utilities growth over the last 5 years have been through acquisitions, which is not usually a good thing. You get good growth out of a utility stock when their rate base is growing, which is when they are adding customers organically. He doesn't have any problem with this company. It’s pretty conservative in nature. You are almost better buying the bonds then the companies, because if the market falls 20%, your bonds, which are yielding roughly the same, will keep their value.

Chart shows a very nice up trend. You can keep holding this and enjoy the yield. Be careful that it doesn’t go below $42.50. Use that as your stop loss. 3.9% dividend yield.

He has a lot of respect for this company. It has a lot of operations in the US now. Over the last 10 years, they have made 2 major acquisitions. The nice thing about this company is that they have a balance of assets that is diversified amongst different regulatory bodies. Dividend yield of 3.89%.