Fortis Inc. (FTS.TO)

If you look at most of the utility and pipeline space in Canada, they are trading at or near their 52-week highs. Their valuations are extremely stretched. This reflects that it has been a good place to hide out in uncertain times, certainly in 2014. The big story has been how last year the worst performing sector in the S&P was the utilities, and this year they are the best performing sector. Doesn't offer growth.

90% regulated, so it is a good place to seek shelter from the storm. Also, has the advantage of having $4.2 billion of rate-based expansion within their existing asset footprints within the next couple of years. He is modeling EPS growth of around 8%. It has a 53% 2015 estimated payout ratio, so you are going to get paid this nice dividend. There will be some dividend growth. Not too expensive.

Sold his holdings when they made a deal in the US. He didn’t really see the synergies. Has never disappointed shareholders in the long-term. A serial dividend increaser. Very fair valuation. Valuation was too rich for him, given its low growth. If it fell, he would look at this one again.

For many years this was a laggard amongst the utilities. They made a US acquisition. One of the few stocks that have been going up lately and he feels this is in recognition that its rate base as a utility is going to go up significantly over the next few years. If you added in the potential for some LNG projects, it could even be higher. Over the next few years he expects there will be more dividend increases.

Don’t sell it at these levels as you will get 10% overall returns including the dividend.

They have a big deal to buy an Arizona public utility. This is a good deal and provides a little bit of growth. He would actually prefer Bell Canada (BCE-T) over this. This is in the low growth area and will definitely be affected by higher interest rates. He would prefer a pipeline to either of these.

Has grown its dividend at about 4% a year for the last 5 years. Dividend yield of 3.74%. Made a $4.2 billion US acquisition in Arizona. When they make acquisitions, it takes a long time for the deals to close. This one took a year. Their model is that as soon as they announce an acquisition, they raise the equity for it. Spent about $900 million on an expansion on a dam in BC, so there will be a double-digit jump in earnings in 2015. Also, expects their dividends in the next couple of years to grow at a faster rate.

Just doubled their preferred share issue from 300 million to 600 million in order to acquire a US utility. This is been a very reliable dividend grower over the last 2 decades and he thinks this will continue. They do very smart deals in buying utilities in the US in order to grow their earnings. The increase in the size of the offering reflects their popularity. For income oriented investors it is hard to find names as consistent.

(A Top Pick Sept 18/13. Up 12.23%.) He expects it will come back to the $32.75 range and test a breakout. Really good dividend and an excellent balance sheet. 90% of its business is regulated. He has a $40 target on this one.

They completed the acquisition of UTS in the US ahead of schedule. This is a real company changing acquisition. Has increased the size of the company. Feels that people are not really seeing how substantial this is going to be over the next couple of years. Expects earnings to go through the $2 level for the next few years. Dividend yield of 3.86%.

He has no problems whatsoever with this one. 3.8% dividend yield. This is for a buy-and-hold investor who is looking for safety.

The UNS transaction is proceeding well and will be modestly accretive to them. This is only a $7 billion company and they have about $8 billion of utility type investments coming online over the next few years. There is a lot of growth here. Also, have potential for a lot of LNG related investments, with their strategic presence in BC.

Very well-run utility and is well-positioned. Their earnings are growing, and they seem to be on the right track. Has a nice yield. Their recent deal in the US is very much a transformational deal for them. It almost doubles their size, and opens up a whole new market to them.

A Western based regulated utility, and the largest in Canada. Thinks the valuation of 16X is a little high. If we are going into a rising interest rate environment, a fully regulated utility will likely have more capital pressure on its stock price than more of a merchant power business.

It made a good bottom. It will go much higher. There is not much resistance. 90% of the business is regulated.