Fortis Inc. (FTS.TO)

(A Top Pick Feb 1/17. Up 18%.) He likes this, but hasn't been buying it lately. His cost basis was normally around $40. They've very successfully diversified from just being a power producer to also being a power transmission system. Over the last 10 years they've made 2 really large acquisitions very successfully. Excellent management. There are exposed to different regulatory systems, but they have enough growth in assets going forward that there will be more free cash flow and higher dividends over time.

It is considered the most conservative of the utilities. He would not trade it based on short term weather conditions. It has $14 billion of projects planned for the next 5 years. They expect to raise their dividend 6% a year over the next 5 years. If you tack that onto their dividend you get 9.5% over a five year period,

EMA-T vs. FTS-T. He has a small preference or FTS-T. You have to be careful if you know higher rates are coming. In the US it is December and March and in Canada with maybe only one rise in 2018. You could see a 10-15% decline if they report flat earnings.

This is in the utility/infrastructure space. A good company and has seen pretty good growth over the last couple of months or so. In a rising interest rate environment, utilities would face some pressures, but this company has withstood that very well. This will continue to move along well, and pays a good dividend yield of 3.7%.

A lot of people are in this stock because of the great yield. It has been a consistent performer. If you are there for yield then you can hold it. If it sold off a bit and you bought it cheaper, and could get double digit returns, then he would have no qualms about it.

EMA-T vs. FTS-T. Utilities and rate hikes. Most of the calls around interest rates are for 1 more non-aggressive interest rate rise. It may not have as great a rise in utilities. They are doing what utilities have been doing recently – consolidating. You might see a slide down within the trading range. FTS-T has an uptrend, unlike EMA-T. It’s okay if both go sideways because you collect the dividend.

Has had 44 years in a row of dividend growth. Just announced a 6.25% increase, $1.70 a share. Our world is going to need electricity 44 years from now and this company has a wonderful installed base. 3.7% dividend yield.

(A Top Pick Oct 12/16. Up 14%.) An electric utility, so it is insulated from commodity exposure. She likes the US acquisition they did, which really expanded their presence in the US. 60% of earnings will be coming from the US. They’ve indicated they can increase their dividend by 6% annually until 2021.

(A Top Pick Feb 21/17. Up 6.89%.) Recently sold this.

Selling very, very close to its low P/B value for the past 10 years. The stock is cheap. A nice defensive company, but has some offensive qualities in a rising market. Dividend yield of 3.5%. (Analysts’ price target is $50.)

This has done well. People tend to pile into these things after they’ve done really well. After having a really good run and making some really good acquisitions, it is still not a bad multiple to its peers, at 17X, but he is only modelling 3.5% EPS over the next couple of years. There are better names out there.

An electrical utility company, generating electricity. You are not going to get a massive up-spike in that kind of company. You will get great and stable income as well as growth over the longer-term. Has been very successful in going into the US and buying assets. Extremely well-managed. They raise their dividend consistently.

He likes this very much. They’ve done a great job in making acquisitions in the US. This is one of the dividend aristocrats of Canada. Thinks they’ve increased dividends 42 years in a row. It is not all that expensive, and is a great, long term investment.

One of his favourite utilities. Has a large US presence. A big part of their M&A growth is behind them. They made 2 major acquisitions in the last few years, one of them being in Texas, so capital expenditures might be going up a little in the near term. They are much more into energy transmission as well as generation. Dividend yield of 3.5%. (Analysts’ price target is $50.)

Historically this had a very strong seasonality during the summer as the rest of the market languished. It only does very well until the beginning of November. Chart shows it has already established an upward trend, and it would be nice to see it move above its current level, which would confirm that it is in an upward trend. A good seasonal trade right through until the beginning of November.