Fortis Inc. (FTS.TO)

It is true that lower rates should otherwise be a tailwind for businesses with leveraged balance sheets. In fact, FTS has recovered meaningfully to reach 52-week highs recently. We think for a conservative name like FTS its performance is quite good. The upside potential from the interest rate tailwinds may not be as attractive as it used to be, but we think FTS is still a high-quality dividend payer. We think FTS can do well from here for shareholders with a potential total return of around 10% annualized return over the long-term. 
Unlock Premium - Try 5i Free  

Mostly electricity distribution. Successful cashflow generation. Core income name. Utilities in US are a big part of its profile. Data centre demand is a growth opportunity, but will take many years. Yield is 3.5%, dividend increases every year.

It is down now because of interest rates. It is one to buy when rates move up. He owns it but it is a good time to trim and take some profits.

A core income stock. Highly defensible with strong cash flows. Half their business is in the US. A $25 billion capital spending plan allows them to raise the dividend 4-6% annually through 2028. Benefits from data centre builds. A long-term hold.

Take a look at ZWU, broadly diversified, higher yield than individual names. He'd much rather have exposure to that, better profile for income seekers. 

Both TRP and FTS have rallied significantly, so it's not favourable from a risk/return standpoint. He buys into corrections and weakness instead.

He hears that more AI use needs more energy and therefore more energy from utilities, but heard this noise in 2020 that higher internet use would drive utility demand. He doesn't totally buy into that, but he likes Fortis' dividend in a market where interest rates continue to decline. Dividend stocks will continue to rally. Likes this long term.

It is not a steeply trending stock but is one of the best managed in Canada. He is buying for clients for a long term hold. The dividend and dividend growth are both in the 4 to 6% range over time.

For income seekers, retirees. Very defensive. Trades 19x PE usually, but is now 16x. Have a diverse business in Canada. Not a screaming grower like all utilities, but offers reasonable growth, more than other utilities, and it pays a 4.5% dividend.

She's buying here. You always want to allocate some part of your portfolio to a defensive stock like this. Not the highest yield, but attractive, under 4%; increases it annually by about 5%. Longer term, has outperformed TSX. Holding for any AI play is way down the road.

It is the second largest diversified utility in Canada and is better than other utilities. Since it is a bit cheaper it is OK to buy now. She likes the diversification.

Transmission and distribution of electricity. About 99% of cashflows are regulated, which makes it steady-eddy, boring, and that's why he likes it. Over 50 years of dividend increases. Regionally diversified. Solid dividend. 

Utility names have all gone down aggressively, it's the interest-rate sensitivity of it all. One of his go-to names. All are very undervalued, but strong dividend yields, so attractive for people looking for income. 

Likes the global growth profile of BIP.UN and the NA one of FTS.

Unfortunately, these stocks aren't working yet; they're later-stage stocks in terms of AI and EVs, which will demand a lot more power that clean energy can supply. It's a little early for names like FTS, but they will benefit. Interest rates remain high which hurts these stocks. So, be patient and collect the 4.5% dividend which they have grown the past 5 years.

ZWU's covered call will pay a higher dividend, though FTS' is solid and growing. ZWU pays more income because you're selling calls. The downside is that as interest rates decline, utilities will improve and you will lose that upside if you hold ZWU and not a plain ETF or Fortis itself. If you are positive utilities, don't use a covered call ETF.