canadian utilities

The Bank of Canada recently cut its benchmark lending rate, from 4.75% to 4.50%, and more cuts seem likely. Lower rates are good news for utilities such as these four, as they reduce their borrowing costs and increase their appeal with bond investors. What’s more, you pay less tax on their dividends compared to bond interest payments.


FORTIS INC....

BCE INC., $45.62, Toronto symbol BCE, is still a buy.

The company is Canada’s largest traditional telephone service provider. It has 1.98 million residential customers in Ontario, Quebec, Manitoba and the Atlantic provinces. It also has 4.50 million high-speed Internet users and 2.08 million fibre-optic TV subscribers....

TECK RESOURCES LTD., $69.23, Toronto symbol TECK.B, remains a buy.

The company is a leading producer of metallurgical coal, a key ingredient in steelmaking. It also produces copper and zinc.

In November 2023, Teck agreed to sell its coal business, known as Elk Valley Resources (EVR).

In January 2024, Teck sold 23% of EVR to Japanese steel maker Nippon Steel Corp....

The share prices of U.S. and Canadian utilities companies in general have not performed well over the past decade, lagging the broad market indexes. Reasons for this weaker performance include slow growth in electricity demand for power producers, as well as high interest rates that have hurt utilities overall.


However, several factors are now driving projections that U.S....

High interest rates boost bond yields—and their appeal with investors. Conversely, those high or rising rates can hurt the appeal of high-yield utilities, and their shares, since utilities are then forced to pay higher interest on their debt. However, with interest rates falling in Canada, and poised to fall in the U.S., the outlook for high-quality utilities is attractive for investors seeking high dividend yields and growth prospects.


Below we discuss two utilities ETFs....

ANDREW PELLER LTD. (class A shares) remains a buy for long-term gains.

The company, Toronto symbols ADW.A (non-voting) $3.82 and ADW.B $5.05, is Canada’s second-largest wine producer, after Arterra Wines.

Peller last raised your quarterly dividend by 10% with the July 2021 payment....

ANDREW PELLER LTD. (class A shares) remains a buy for long-term gains.

The company, Toronto symbols ADW.A (non-voting) $3.79 and ADW.B $5.05, is Canada’s second-largest wine producer, after Arterra Wines.

In its fiscal 2024 fourth quarter, ended March 31, 2024, Peller’s sales rose 9.4%, to $85.01 million from $77.71 million a year earlier....

Demand for electrical power in Canada continues to rise due to several factors. Those include an expanding population and the shift to electric-powered cars. Moreover, the construction of new datacentres to handle power-intense artificial intelligence will also spur electricity demand.


A good way for investors to tap those trends is with these three high-quality power utilities....

INTERNATIONAL BUSINESS MACHINES CORP., $165.71, New York symbol IBM, is a top pick for 2024.

The company is one of the world’s largest computer firms, with operations in over 175 countries.

With the June 2024 payment, IBM will raise your quarterly dividend by 0.6%, to $1.67 a share from $1.66....

CANADIAN UTILITIES LTD., $31.09, Toronto symbol CU, (TSINetwork Rating: Above Average; www.canadianutilities.com) is a buy.

Canadian Utilities distributes electricity and natural gas in Alberta and Australia....