East-coast utilities broaden their horizons

Article Excerpt

Fortis and Emera have used the steady cash flow from their power utilities in Atlantic Canada to fund new investments in other businesses. These have helped expand their operations beyond a single region, and enhanced their growth prospects. FORTIS INC. $25 (Toronto symbol FTS; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 170.3 million; Market cap: $4.3 billion; Price-to-sales ratio: 1.1; SI Rating: Above Average) gets just 15% of its revenue from Newfoundland Power, its original business. In the past few years, the company has bought electrical utilities in four other Canadian provinces, as well as the U.S. and Caribbean. However, about half of its revenue now comes from Terasen Inc., which distributes natural gas in British Columbia. The company paid $3.7 billion for Terasen in May 2007. In the three months ended June 30, 2009, Fortis’s earnings jumped 82.8%, to $53 million, or $0.31 a share, from $29 million, or $0.18 a share, a year earlier. If you exclude one-time charges in…

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