Canadian Utilities (CU-T)

With rates moving lower, we should be looking at utilities in general. Stock's topped out in last couple of weeks, could be a near-term ceiling. In terms of LNG demand strengthening over time, he'd prefer names like ENB or TRP. Those names are larger and have more sustainable dividend growth.

It has broken out and looks good so far. Utilities tend to move when the market goes risk off but the market is risk on again

It is primarily Alberta focused. He prefers Fortis with a strong Return on Capital. Rates should come down and income names should do better.

Low to almost-no growth, interest-rate sensitive. Likes the sector in general, should do well as rates come down over time (probably faster in Canada). So any stock in the sector should get some bump in price, along with the dividend, so you should get a reasonable return.

Likes the recurring revenue and steady revenue streams. One of the more profitable utilities in Canada. Pretty strong balance sheet. Good dividend yield. However, he'd look at TRP instead for more attractive valuation and higher yield.

Not sure why stock's dropped. Group as a whole has pulled back because of rising interest rates. With interest rates stabilizing in the past month, stock's played catch up. Good sector for income, dividend safe. FTS is her core utility name.

The sector is fairly interest-rate sensitive, so it's sold off. Nothing wrong with it, so you can hold if you own it. But better opportunities such as AQN, FTS, and BIP.UN, and it all has to do with their growth outlook. 

Editor's Note: The question was on his preference between T and CU. Total revenue at Telus was up 16% and the capex is down which is good. It is pricey at 25X. CU is a low risk utility and has a very nice dividend and price. Since it has low growth he prefers Telus.

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. There is no news that would account for the correction. Dividend stocks may see some weakness if there are rate fears. The stock also fell below its 50-day moving average so this may have caused some technical selling. Unlock Premium - Try 5i Free

They're focused on Alberta. Likes it. They've transitioned well to having more regulated cash flows, but there's less growth than Northland Power or Boralex, but CU has a cheaper PE. It's a steady eddy.

Likes it. He owns Fortis and Emera instead, though. CU is landlocked in Alberta, which is a problem. Their dividend is solid and will grow. But this ranks third between the other two names here.

He likes utilities; defensive and paying good dividends in a low rate environment. CU depends on Alberta, which is challenged by oil. He prefers Fortis and Boralex, Innergex and AQN-T, which will maintain or increase current stock levels. If you own this, hold it and wait for a recovery; the dividend is safe.

CU recently sold off a lot of its electricity-generating assets, so still good? He'd rather shift to an Enbridge or Altagas. Electricity generation is low-growth and heavily regulated. Long-term utility rates won't move much and inflation will kick back in.