Fortis Inc. (FTS.TO)

Switch this to Pembina Pipeline (PPL-T)? That would be a good switch. Looking at his performance in 2013, the one sector that hit him hard was the electrical utilities. The sector is very safe and not bad dividends, but produced negative returns as a group in 2013. Likes Pembina as well as Inter Pipeline (IPL-T). There is a big need to expand the small pipeline infrastructure in Alberta. He can see real growth going on for the foreseeable future.

Recently acquired UNS Energy (UNS-N), a very big purchase for them. He is not very positive on the company. He would typically consider this as a Short position because it does not have a lot of growth in its business model. They use a lot of their free cash flow to fund their dividend. When they make acquisitions, they have to raise capital in the market, which makes it very unpredictable.

(Market Call Minute.) Big utility company. Stock hasn’t done very much for a long time. Not an unreasonable Buy, but he favours Canadian Utilities (CU-T) over this.

Has a really good book of business, 2 million customers in North America. If it broke below $30, it would cause him to have some bigger issues such as are rates going up higher or is the line in the sand of 3%-3.5% around the 10 year bonds, really going to hold. Very good risk/reward.

(Market Call Minute) Held flat and then investors got tired of it. It did not have enough yield to keep it up there.

Sold it because PE got too high relative to yield. Moved to REITs. Would not look at it now.

Track record is amazing. Longest track record of dividend increases in Canada. His problem is that their last acquisition did not have anything to the bottom line. He doesn’t trust management that this latest acquisition will add anything either. Doesn’t see synergies in acquiring a utility in Tucson, Arizona versus the utilities that they have now in Canada. Sold his holdings just before the last acquisition.

Big potential acquisition of utility in AZ. Probably a cap on this stock. It might get weak. He heard it wasn’t going that well.

Convertible debentures. (Market Call Minute) Thinks there are a lot of bells and whistles on the shares. Nice yield but you are levered up 3 times.

Financing their Arizona acquisition by convertible debentures. He is still looking at this. His concern is that it is a big bite. He is not totally familiar with the Arizona area. Hasn’t decided how he feels about this yet.

(Market Call Minute) Nothing wrong except it is defensive and sensitive to interest rates.

Just sold his holdings because earnings are going nowhere, PE is very high and interest rates are going higher. Doesn’t see that they can raise the dividends much higher since earnings are not growing.

Has owned this for years and still likes it. A slow dividend grower but a solid company. Share price has been held back because they bought US assets and the return on them will take a couple of years longer because regulators put a cap on this.

Thinks this goes higher. Has a target of $35. They’ve gone through a number of quarters for years with earnings that have just continued to go down. Thinks they have bottomed here. Sees growth coming from utility expansion of almost $5 billion over the next 3 years. Sees the expiration of rate freezes at their subsidiary CH Energy occurring in the mid-2015. Waneta Dam revenues should start in 2015. Their unregulated businesses he thinks, are going to improve from here or they can be sold.

High-quality business. Taper talks from the fed really hammered all interest sensitive stocks. This found some support and he is looking for it to reach $34-$35 and to get the dividend. Nice boring play.