Fortis Inc. (FTS-T)

Everybody's been crowding into what's been working. Bond proxy, not too challenged by Trump tariffs. Great long-term compounder. Raises dividend every year, by ~5%. Good long-term growth. Q4 beat. Steady player, without all the ups and downs.

One knock is that it's only growing 5%, but trading at 17x. So, no, don't buy at this level. In the space it's time to look at AQN again (believe it or not), GEI, or ALA.

Analysts tend to be conservative. It is a pretty solid, high-paying job, and they do not get much benefit from 'sticking their neck out' versus the crowd. Target prices and recommendations tend to be similar. They do not get fired if 'everyone else was also wrong' but if they are an outlier then their calls are more closely scrutinized. AT 19X earnings FTS still looks OK to us, and its positive momentum in a bad market we think is a strong sign as well. But, it is up 28% in a year, and we would not expect those types of returns on a regular basis. It is still a relatively slow-growth utility company. 
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Consistent and reliable. A quality utility, which are generally safe and slow.

EMA is his choice. Bumps along the road, but the price has appreciated. Rates coming down have helped EMA's profit. Over time, expectation is that EMA will be the better choice over FTS. 

It has strong resistance at $63 and is pulling back. It has a floor of $58 and could bounce there. Stronger support is at $55, but if it breaks that, it could fall to the next support at $42.

One of his go-to names in the space.

Is tied to interest rates. Long rates have rebounded lately. A very well-managed company with 51 straight years of raising their dividend. It will remain a core position.

Benefits from recent interest rate cuts, but note that long-term rates are actually rising and this will limit dividend stocks like this. Why? Concerns of inflation returning, or signs of a strong economy coming, but also there could be a debt-maturing wall coming. There's $300 trillion of debt around the world. Fortis pays a 4% dividend, but doesn't grow much. So, considering interest rates ahead, he may exit this at the end of 2025.

It is true that lower rates should otherwise be a tailwind for businesses with leveraged balance sheets. In fact, FTS has recovered meaningfully to reach 52-week highs recently. We think for a conservative name like FTS its performance is quite good. The upside potential from the interest rate tailwinds may not be as attractive as it used to be, but we think FTS is still a high-quality dividend payer. We think FTS can do well from here for shareholders with a potential total return of around 10% annualized return over the long-term. 
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Mostly electricity distribution. Successful cashflow generation. Core income name. Utilities in US are a big part of its profile. Data centre demand is a growth opportunity, but will take many years. Yield is 3.5%, dividend increases every year.

It is down now because of interest rates. It is one to buy when rates move up. He owns it but it is a good time to trim and take some profits.

A core income stock. Highly defensible with strong cash flows. Half their business is in the US. A $25 billion capital spending plan allows them to raise the dividend 4-6% annually through 2028. Benefits from data centre builds. A long-term hold.

Take a look at ZWU, broadly diversified, higher yield than individual names. He'd much rather have exposure to that, better profile for income seekers. 

Both TRP and FTS have rallied significantly, so it's not favourable from a risk/return standpoint. He buys into corrections and weakness instead.

He hears that more AI use needs more energy and therefore more energy from utilities, but heard this noise in 2020 that higher internet use would drive utility demand. He doesn't totally buy into that, but he likes Fortis' dividend in a market where interest rates continue to decline. Dividend stocks will continue to rally. Likes this long term.