Fortis Inc. (FTS.TO)

(A Top Pick Aug 16/16. Up 12.58%.) Continues to like this. It has held up well relative to a lot of other interest sensitive names. She likes the US acquisition they did earlier on. Dividend yield of about 3.5%.

Has been under some pressure as the market anticipates rising interest rates. Thinks the market is overreacting and interest rates are going to stay relatively low, because inflation is not rearing its head. On that basis, it is probably not a bad Buy in this range. Well run, and one of the more growth oriented utilities. You should be buying this for the safe dividend.

Utility oriented stocks tend to do very well in the summer. This had a good move this year, but is now having some difficulty. On a seasonal basis, it is okay to hold. Historically when you get into the fall, you want to choose something that has more beta. For now stick with it, but if there’s any kind of technical rolling over, then look for better opportunities elsewhere.

A good utility. Feels interest rates are going to increase, but at a relatively slow rate. If you want a good, solid dividend paying stock, and a management that has been good in its takeovers, this one does a great job. They tend to increase dividends and revenues at a steady rate.

Relatively cheap and trading at about 1.25X BV, which is about as low as the company gets. Not a bad dividend of 3.6% and nice upside potential of about 25% for a utility. It should be clear to about $51. (Analysts’ price target is $50.)

Well-managed. Made a large Texas acquisition a few years back which turned out very well. Then they bought the transmission assets. They have a good growth pattern ahead. You are buying a lot of US exposure now. He thinks they are in a good place at a good time. The stock has performed very well.

This is a stock he would steer clear of. The economy is strengthening, so there is the expectation that interest rates are going to rise. Anything that investors have been treating as bond proxies or surrogates for income, is vulnerable to government bond yields going higher. Sees better opportunities in pipelines.

With all the big acquisitions in North America, it is very stable and safe, with a dividend growth. Their earnings growth and dividend growth last year were very impressive. A lot of that came from acquisitions. This is clearly a core holding for income investors. The risk is if interest rates go a lot higher, everybody is going to hurt, including this company. But this is worth holding even in that situation.

Great price momentum, but poor valuation. A utility, trading at low ROE, high EV to EBITDA, high PE. Buyers typically hold a stock like this for stability and for its yield. On those 2 measures, it has both.

Utility stocks tend to do better in the summer. They are more defensive and have a higher yield. Seasonal strength is from about now all the way through to September. The chart indicates it is getting closer to the upper limit of the shorter-term trend channel. It is also getting close to the upper limit of the longer-term trend channel. Utility stocks are not showing the momentum that you would normally expect moving forward. He would stay away from this right now. Wait until it comes back to some of its major moving averages and level of support of about $45.

Because this has had a steady increase in their dividend year after year, the stock has been climbing. As interest rates go down, stocks go up. One of the premier electric utilities to own. Dividend yield of 3.4%.

Emera (EMA-T) Fortis (FTS-T) or Algonquin (AQN-T)? A space where there has been a lot of upward pressure this year, so it is very hard to find bargains. Of the larger utilities, he thinks Emera is the best price and has the best dividend yield, so is the one he would probably look at. Fortis is his largest position.

(A Top Pick March 30/16. Up 18%.) A very high-quality utility. By putting this in your portfolio, you are actually getting a very defensive business. Recently made a large acquisition in the US, which should be accretive to earnings. Cash flow growth should continue to materialize, especially given that a lot of its earnings come from regulated utilities. Thinks there is still 10%-15% upside in the name.

A great company, but utilities are not his favourite space. If you think the economy is getting better, it is not the most economically sensitive group. However, if you think rates are going higher slowly over time, then you need to be able to find a dividend stream that will grow a little every year. Although this company is not a rocket ship, it has probably had the best record in Canada for dividend growth. A good mix between regulated utilities and non-regulated.

She added it a year to a year and half ago. Electrical utility are very stable. They acquired a gas utility in the US last year and it really expanded their exposure. They create a rising stream of dividends. 3.6% yield, a safe heaven. She would still hold it or scale into the stock.