Canadian Utilities (CU.TO)

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.

Has held this for very long time. 3.8% dividend yield. Very low risk.

Long-term hold? A regulated utility, mostly out West in Alberta. It hasn’t been as growthy as some of the other utility companies. An unbelievable dividend raiser. Good, insider ownership by a family that cares. If interest rates spike up, it is not going to be good for utility companies, but they are working on a lot of growth projects. This is a good investment here.

It is better than the rest of the utility space. His model price is $38.29, a 5%. It would not get hit if interest rates went up.

(Top Pick Dec 24/15, Up 13.70%) He also owns some of the preferreds. This is a pretty decent name within the utility sector, defensive and can withstand marginal rate increases. It is not too rich for his liking.

A classic Canadian utility, and thinks that this is probably one of the better ones. Undervalued. Great dividend yield.

Sometimes boring is good. This pays a dividend and raises it on a regular basis. He likes stocks like this for RESP’s. If your kids are little and you have a long time horizon, there is nothing better than sticking a couple of dividend growers in there. Enbridge (ENB-T) and Fortis (FTS-T) fall into much the same kind of category as a Canadian utility.

Scores well in terms of discount to intrinsic value on a price to cash flow multiple. Thinks there is a better discount and a better catalyst with some of its peers. (See Top Picks.)