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BUY
It's near its all-time high. It's a very steady company. Still buying it, averaging into it. Pays a steady 5.5% dividend.
telephone utilities
BUY
Growth prospects? They went through a difficult time in the middle/end of the last decade. ALA is well-positioned now though. They've had a big change in their counter-parties with CNQ taking over Painted Pony, and a US major taking over another Canadian company; so the quality of their counter-parties has risen. What's also missed in their story is their steady utility growth in the U.S. where they were slammed for buying that utility, but those critics are now gone as ALA is enjoying steady 8% rate-based growth to boost ROE and deleverage their balance sheet a lot. He expects a dividend increase soon. He likes it and it remains one of his biggest holdings.
oil / gas
PAST TOP PICK
(A Top Pick Nov 04/20, Up 22%) Definitely would buy it again. The stock was on a nice trend until they adjusted down their dividend growth. The market took it negatively, but he notes that the dividend is nearly 6% and it's grown 7.5% annually for the last 10 years, doubled the dividend in the last 10 years. He's happy with TC, and their positioning in LNG.
oil / gas pipelines
PAST TOP PICK
(A Top Pick Nov 04/20, Up 34%) It was a lot better a few weeks ago until they released their quarter. They stopped their dividend early in Covid and he bought this expecting them to reinstate that when things normalized. CAE has bought two companies this year which prevented that, but CAE is a cash generator that will restore that dividend. He'd like to see that dividend restored before they buy more. Their secret ingredient is exposure to business jets, which will see big growth. He's adding at current levels after a pullback.
transportation equip & components
PAST TOP PICK
(A Top Pick Nov 04/20, Up 11%) He continues to buy this. They've had nearly 5 decades of dividend increases, so it's an attractive total return over time. He still buys this. You can buy this and forget about it. It's one of the best-run companies in the world. He likes the outlook for electric utility given the future of e-cars and the greening of the power grid.
electrical utilities
COMMENT
How do inflation and interest rates effect stock valuations We've had declining interest rates since 1983 which has fuelled stock valuations. Generally: 15 years ago a Canadian 10-year bond yielding 5% equalled a stock with a 5% dividend or a PE of 20x. Today, that Canadian bond yields, say 1%, but at a 100x PE with no chance of appreciation at maturity. Historically, stocks trade at 10-25x PE. When interest rates decline, this makes stocks more attractive. Inflation is rising, but he's waiting and seeing. Inflation was predictable given supply constraints and sudden demand. In time, these two forces will level out. Even a small interest rise will have a big chilling effect on the economy. He's not worried about inflation long term.
Unknown
BUY
They have 35 years to go to be the next Fortis, but they're on the right track. The stock has dropped because of a big, unsurprising acquisition of Kentucky Power and did an equity issue. Long-term tailwinds are the greening of the energy grid and short. Renewable power stocks ran up after Biden was elected, then pulled back earlier this year. That froth came off. All headwinds are temporary though. He's been buying at current levels and believes in it long-term. The grid is becoming greener. He's positive all green energy stocks. AQN pays a steady dividend.
electrical utilities