Canadian Utilities (CU.TO)

He loves this company. It is a dividend grower, conservatively managed and a core holding of his. It is a conservative parking spot for people who are worried about the markets.

(Market Call Minute.) Hopefully Alberta is getting better, but this is the lowest yield of the group.

(A Top Pick June 18/15. Up 8.3%.) Thinks we are in a “lower for longer” interest rate environment, so he is not worried for too long about being in this space.

(Top Pick Mar 9/15, Down 11.20%) They hold the record for the most consecutive dividend increases. He plans to keep holding it. They just raised the dividend 10%. Hold this indefinitely.

It is unloved. He is picking away at it. It is a good place to get a 4% yield. They have transmission and distribution assets in Western Canada. There is little commodity price exposure. There is some capital appreciation potential as well as dividend growth.

He likes the company and he likes the big family ownership in it. They have a lot of assets that they are working on, both in Canada and Australia and transition lines. Wonderful dividend growth over the years, which he doesn’t see stopping anytime soon. Doesn’t think you can go too far wrong owning this.

This is a bit of a contrarian play. Everything has gone wrong for them. There was the oil collapse, an NDP victory in Alberta, rising yields recently which really soured sentiment. However, it has gotten to a level which he thinks is just too cheap to ignore. Trading at 14X 2016 earnings, versus the group at around 21. Thinks you will get your non-regulated assets for free, and yet they have multi-years of robust utility growth, regardless of what happens to the Alberta economy. Pristine balance sheet and low risk. Dividend yield of 3.35%.

Very well-managed with an extremely long track record of dividend increases every single year. They are spending $5-$6 billion on new investments in Alberta and Western Canada. This has suffered from concerns about a possible new tax regime and concerns about shutting down coal power plants. Valuation is very attractive compared to others. He sees an outburst of growth going forward. Below $40 is an absolute terrific buy.

Growth potential is mid-single digits. The utility sector is very interest rate sensitive. The cash flows are very stable and so you should buy this sector if you think rates are going to remain relatively stable. People rotate out of this when interest rates go up.

(Top Pick May 21/14, Down 2.96%) It is always the forgotten utility company. It has such a long track record of increasing its dividend. This company has big mid stream assets and a few years ago they mulled over spinning these assets out. He does not think investors fully realize what happens if they do this. He thinks there is still potential for them to do this.

The utility sector is relatively less attractive to him right now. He expects a short-term interest rate increase in the US in the next few months. This one is very interest rate sensitive. He would be more inclined to find something that was a little bit more economically sensitive. If you are looking for dividends, you could look at some of the financials in the US where there is going to be some pretty good dividend growth. He would suggest looking at J.P. Morgan (JPM-N) where the currency is going to help you and you are going to get faster dividend growth. This is a sector that people really care about right now.

It pays and increases a good dividend. Valuation will not grow substantially. It is very stable and profitable. This one is how you get rich over time.

We are in the later third of the bull market and there is a concern of a correction. They have increased the dividend for 44 years in a row. They have projects to keep their growth going. They have the lowest valuation of all the other pipelines, etc.

(Top Pick Oct 21/13, Up 4.25%) Nice and defensive if you need the income.

(A Top Pick Oct 31/13. Up 5.89%.) The interest sensitives have just not been the market darlings up until about Sept 19th, when these were the stocks that did not go down with the market.