Good time to buy Fortis

Article Excerpt

FORTIS INC. $35 (Toronto symbol FTS; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 215.4 million; Market cap: $7.5 billion; Price-to-sales ratio: 1.6; Dividend yield 3.7%; TSINetwork Rating: Above Average; www.fortis.ca) is the main electricity supplier in Newfoundland and P.E.I. It also distributes natural gas in B.C. and operates power plants in other parts of Canada, the U.S. and the Caribbean. The company recently completed its purchase of UNS Energy Corp., which operates power plants and distributes electricity and natural gas to 657,000 customers in Arizona. Fortis paid $4.5 billion U.S., which includes assuming $2.0 billion U.S. of UNS’s debt. The new operations will add $1.5 billion U.S. to Fortis’s annual revenue of $4.7 billion (Canadian). The purchase also lowers Fortis’s reliance on Atlantic Canada. The company is now considering selling or spinning off its Fortis Properties division, which operates 23 hotels in eight provinces and owns 2.8 million square feet of commercial real estate in Atlantic Canada. In…