Fortis Inc. (FTS.TO)

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.

A conservative investment, but the kind of thing that can give you a regular dividend. Has been showing consistent longer-term growth as well. Chart shows it has established an upward trend including a nice breakout recently. Technicals look very good.

Utilities have done OK, but we certainly haven’t got the kind of bounce out of them that he got out of other parts of the market. Bought an energy company out of Arizona, so it shows that it is a company that is able to grow. Got hit with the “taper tantrum” last year, but it is coming back and seems to be moving back up on the chart. A good, safe place to put your money. 4% dividend yield.

Would like to see the stock getting above the pivot in 2013 of about $32.50, which he suspects it probably will. As a group, utilities should be okay.

(A Top Pick in June 5/13. Down 7.44%.) Short. This didn’t work out. The market has been very defensive this year. Had thought bond yields were going to go higher. He is continuing to Short the stock.

US acquisition could close in Sept. and is going better than they thought. Sees modest accretion with the deal. It is capable of a lot of growth.

This company is an innovator, and finds new things to do. Pays a decent dividend.

They are still waiting for approval of the electrical utility acquisition in Arizona. They have regulated and non-regulated assets. Regulated would be Canada, US and a little bit in the Caribbean. Non-regulated would be a little bit in Belize and Holiday Inns out East. They have so many projects going on now that this is really their growth spurts because if the utility rate base is growing, the earnings are going to follow and ultimately the dividend should start to grow more than a penny a year. Compared to the big guys, they are trading at a much lower multiple. If there is a selloff in the market in the summer then utilities at these low rates should continue to be attractive. Yielding close to 4% now.

More of a growth utility. Flat earnings for 2 years. 2013 they had a bad capital decision by BC gov’t that hurt their electrical distribution business. They bought an electrical utility in Arizona and will close at end of year so next year these two things will be out of the way, so earnings are likely to be up double digit easily.

Has been quite a disappointing stock over the last couple of years for various reasons. Have made modest dividend increases as well as doing 2 acquisitions, one in New York and the other in Arizona, which should be consummated in the 4^th quarter. Together with some more favourable utilities commission awards and the BC Hydro Electric project, cash flow should grow at about 6% per year for the next 4-5 years. You should get low double-digit returns. Yield of 3.98%.

A company that hasn’t really grown for a lot of years and, as a result, it is trading at a cheaper multiple. Trading at around 15X and he thinks it should trade at around 18X given where bond yields are. Sees a lot of organic growth coming over the next year and over the next 5 years he sees 6.5 billion. Thinks they can grow their earnings by about 8.5% between now and 2015. Sees a lot of growth potential in 2015 in BC with LNG and in Alberta with expansions. Feels the dividend is safe.

Stock is underwater year-over-year. This could be an entry point right now but he could find better companies yielding 4% dividends and with better growth.

Purchased UNS energy. Expects approval in the next number of months and should close before year end. Increases footprint for this company. This management has been fairly adept at expanding the rate base for this company. One of the larger investor owned distributors of utility and power and Canada. Over 4% yield. Represents fairly good value at these levels.

He is on the fence. The utilities as a group were very poor performers in 2013. It was partly because interest rates were going to rise. He has not been expanding this sector and wondering about pulling back and putting funds in other sectors. This Arizona purchase has cast a new light on it.