canadian utilities

CANADIAN UTILITIES LTD. $37 (www.canadianutilities.com) distributes electricity and natural gas in Alberta and Australia. The company has raised its quarterly dividend by 10.0%, to $0.3575 a share from $0.325. The new annual rate of $1.43 yields 3.9%. Buy.


ATCO LTD....

Canadian Utilities and ATCO offer investors two ways to buy essentially the same businesses.


We like both stocks, but income-seeking investors should pick Canadian Utilities for its higher payout. Value seekers, on the other hand, should buy the parent, ATCO, for its holding company discount.


CANADIAN UTILITIES LTD. (Toronto symbols CU [class A non-voting] $37 and CU.X [class B voting] $37; Income-Growth Dividend Payer Portfolio, Utilities sector; Shares outstanding: 268.1 million; Market cap: $9.9 billion; Dividend yield: 3.9%; Dividend Sustainability Rating: Highest; www.canadianutilities.com) distributes electricity and natural gas in Alberta and Australia....

ATCO LTD. (Toronto symbols ACO.X [class I non-voting] $42 and ACO.Y [class II voting] $42; Income Portfolio, Utilities sector; Shares outstanding: 114.7 million; Market cap: $4.8 billion; Price-to-sales ratio: 1.2; Dividend yield: 2.7%; TSINetwork Rating: Above Average; www....

ATCO LTD. (Toronto symbols ACO.X [class I non-voting] $47 and ACO.Y [class II voting] $47; Income Portfolio, Utilities sector; Shares outstanding: 114.3 million; Market cap: $5.4 billion; Price-to-sales ratio: 1.3; Dividend yield: 2.4%; TSINetwork Rating: Above Average; www.atco.com) gets most of its earnings from its 53.1% stake in Canadian Utilities (see left)....

Canadian Utilities is a long-term favourite of ours, mainly due to its stable cash flows and annual dividend increases.

We also like its parent company ATCO (see box), which gives you a way to buy Canadian Utilities at a discount. However, ATCO pays a lower dividend....

We still think investors will profit most—and with the least risk—by buying shares of well-established, dividend-paying stocks with strong business prospects.



These are companies that have leading positions in healthy industries. They also have strong management that will make the right moves to remain competitive in a changing market.



Stocks like these give investors an additional measure of safety despite today’s volatility....

Dear Reader: Most successful investors describe themselves as buy-and-hold investors. But for many, their strategy is more like buy-and-hold-till-I-get-bored, or until I see or hear about something better on TV or the Internet.

Instead, rather than ―buy and hold‖, we prefer a “buy and watch closely” strategy....

CANADIAN UTILITIES LTD. $37 (www.canadianutilities.com) distributes electricity and natural gas in Alberta and Australia. It also operates 15 power plants—13 in Canada; 2 in Australia. The company earned $0.65 a share in the first quarter of 2016. That’s up 6.6% from $0.61 a year earlier....

GREAT-WEST LIFECO INC. $34 (www.greatwestlifeco.com) sells health and life insurance in Canada, the U.S. and Europe. It also offers mutual funds, retirement planning and wealth management. The company paid out higher life and health insurance claims in the three months ended March 31, 2016....

CANADIAN UTILITIES LTD. (Toronto symbols CU [class A non-voting] $35 and CU.X [class B voting] $35; Income Portfolio, Utilities sector; Shares outstanding: 267.0 million; Market cap: $9.3 billion; Price-to-sales ratio: 2.8; Dividend yield: 3.7%; TSINetwork Rating: Above Average; www.canadianutilities.com) distributes electricity and natural gas in Alberta and Australia. It also operates 15 power plants in Canada (13) and Australia (2). ATCO Ltd. (see right) owns 53.1% of the company. Due to lower power prices in Alberta and the sale of its information technology subsidiary, the company’s earnings in 2015 dropped 50.5%, to $352 million from $711 million in 2014. Per-share earnings fell 56.0%, to $1.11 from $2.52 on more shares outstanding. Without unusual items, earnings fell 16.0%. Revenue declined 9.3%, to $3.3 billion from $3.6 billion. In December 2015, the company completed and started operating a 485-kilometre power line in eastern Alberta. This is the longest transmission line in Alberta’s history. Other new projects include a gas pipeline and power plant in Mexico, and four underground gas-storage facilities in Alberta....