Canadian Utilities

CU-T

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.

CU vs. H Hydro One had serious issues, but a decent dividend. If he had to pick one right now, he'd pick CU. Looks a bit steadier. Hydro One is in nosebleed territory, and looks as though it's starting to come off. CU is consolidating, and looks to go higher short-term. $35 is a good stop level to sell CU, $22 for Hydro One.

These names are interest sensitive. It is the yield that makes them interest sensitive. Be cautious about your total exposure to interest sensitives.

It tends to bottom as the market is topping. It has a good yield and is low risk. (Analysts’ target: $36.86).

This is an interest-sensitive stock. It is currently selling at its model price. The dividend is covered by earnings. He is positive on the stock. The stock has come down a fair bit and is at a good-looking point for buying. If it does go down further, to $31, he would see a warning that the stock is going to go lower. However, there is no sign of that here, yet.

He likes this stock and thinks it is about to enter a period of seasonal strength, which begins in late-July typically. Once it breaks through the the bearish channel started back in mid-2017, it should be a good rally. He does not own any utilities at the moment since they saw the increase in interest rates coming. Now, he thinks interest rates will plateau soon. He prefers Fortis (FTS-T).

He's researched this stock only recently. being Alberta-centric and rising interest rates are headwinds for them. They've grown the dividend consistently, so it's looking more attractive. He's watching it. Rising interest rates may pressure utilities stock further so that may be the time to step in. But rates won't rise a lot more, either. 4.7% dividend

When we talk about rising interest rates affecting utility stocks, it's a trade in market terminology. What happens in real cases is that as interest rates go up, these companies have a lot of debt and have to roll over their debt at higher rates. That squeezes the margins. However, over time, they can apply to their regulatory bodies for a rate of return increase on what they charge people. As rates rise, if you get another 5%-10% correction, you start dipping your toe in and trying to average up.

Has owned this in the past. They’ve increased their dividend at a modest pace over time, and will continue to do so. The stock has gone sideways, really waiting on what is happening in Alberta and how they are reorganizing the whole electric distribution. A well-managed company. He would definitely look at this again when he was more defensive. Dividend yield of 3.7%.

It is one of the stocks he owns across his client base. They are trading at a slight discount. The government in the prairies is funding clean energy that benefits CU-T. It is suffering the Alberta oil price.