CANADIAN UTILITIES LTD. - Toronto symbols CU $72 and CU.X $72

CANADIAN UTILITIES LTD. (Toronto symbols CU [class A non-voting] $72 and CU.X [class B voting] $72; Income Portfolio, Utilities sector; Shares outstanding: 127.6 million; Market cap: $9.2 billion; Price-to-sales ratio: 3.0; Dividend yield: 2.5%; TSINetwork Rating: Above Average; www.canadianutilities.com) distributes electricity and natural gas in Alberta. It also operates 19 power plants in Canada, Australia and the U.K. ATCO Ltd. (see below) owns 52.7% of the company.

In July 2011, Canadian Utilities paid $1.1 billion for a company that distributes natural gas in Perth, Australia. This purchase helped push up revenue by 3.5% in the first quarter of 2012, to $837 million from $809 million a year earlier. Earnings rose 9.7%, to $193 million from $176 million. Because it had more shares outstanding, its earnings per share rose at a slower pace of 8.3%, to $1.44 from $1.33.

Canadian Utilities will probably earn $4.06 a share in 2012. The stock trades at 17.7 times that estimate. The company has raised its dividend every year since 1972. The current rate of $1.77 a share yields 2.5%.

Canadian Utilities is a buy. The more liquid class A nonvoting shares are the better choice.

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