Fortis Inc. (FTS.TO)

(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.

It is in a 3 year uptrend and looks like it recently broke out of a level of resistance. The breakouts are very bullish. It could pull back to old resistance. He can’t give a target at this point. If it pulled back a buck or so he would probably jump on it.

An extremely well-managed company with assets in Canada and the US. A utility with electrical generation and transmission. They recently bought a dam in BC. Have grown their dividend in the last 43 years, so he would expect more dividend growth.

(A Top Pick Jan 20/16. Up 28%.) He is looking for a rate base growth of 5% a year, and a dividend growth comparable to that. They’ve done a great job of expanding into the US, which actually represents over 55% of their revenues.

Utilities in Canada, for some reason, are screening better than their US counterparts. As a whole, he cannot think of a Canadian utility that he would not recommend. Return on capital has been very consistent. Valuations are very reasonable. It is getting close to his top of 30% premium to invested capital. 3.5% dividend yield. He likes this one.

One of those companies that has a great, long term program that has kept it growing. The dividend has been good. This is one where you could step in and take a position. 3.7% dividend yield.

If rates go up, typically utilities underperform. However, if rates are going up because of inflationary pressures, regulators typically raise the rate of return on the underlying assets. They have a big acquisition in the US which left them in good stead. They’ve done a good job in growing dividends and this is a good kind of core holding.

(Top Pick Mar 3/16, Up 19%) They made a nice acquisition. He has nothing against the company. He cannot recommend a sell and would be happy to hold it.

It pays a nice dividend. It is one of two growth utilities in Canada. They have diversified themselves into the US and also in the kind of utility they own. They raise their dividends on a regular basis. When interest rates start to go up meaningfully, it won’t participate in the same way. It should be a part of everyone’s portfolio – either this or EMA-T.

(A Top Pick June 2/16. Up 11%.) Recently did a huge acquisition in the US. He admires their diversification across many regulatory factions. They are now well positioned in the US.

This is a good time to Buy. Fortis, Emera (EMA-T), TransCanada (TRP-T) and Enbridge (ENB-T) have all made major forays into the US. This one made an acquisition of a regulated utility, which is going to give them some good growth opportunities. Looking forward, he can see further increases in activity in the US, and longer-term a dividend growth of around 6%.

Which utility stock has the best dividend growth profile? He would suggest you look at this one, which recently made a big acquisition in the US. They are paying about 3.6% now, and are committed to growing the dividend at about 5%-6% per year. Earnings are projected to grow at a similar rate. Trading at a reasonable valuation.

Closed on ITC Corp last year, a US electric utility. That increases their exposure in the US. She likes this utility, because it is noncyclical and non-commodity-based. Pretty defensive. 90% of cash flow comes from regulated assets. They’ve increased the dividend for 43 consecutive years, and she doesn’t see that changing. She can see it growing 6% annually through 2021. That is important for income stocks in a potential rising rate environment. Has a price target of about 10% upside plus the dividend, giving a total return of about 13%. Dividend yield of 3.6%. (Analysts’ price target is $48.)