Shift to Unregulated Business Cuts CU’s Risk

Article Excerpt

CANADIAN UTILITIES LTD. $37 (Toronto symbol CU (old symbol CU.NV); Income Portfolio, Utilities sector; SI Rating: Above average) is one of Alberta’s leading suppliers of natural gas (940,000 customers) and electricity (211,000 customers). It also operates power plants in other parts of Canada, Australia, and the UK, and provides engineering and related services to other gas and power companies. The company is slowly shifting its focus to its regulated businesses, which supply about half of its revenue and income. While that limits its growth prospects, it greatly cuts its risk and helps provide it with more predictable cash flows. Canadian Utilities still on a diet Two years ago, Canadian Utilities sold its retail gas and electric operations. Deregulation opened up this market to competition, and the company decided it would rather focus on its wholesale business. The company may spin off or sell more assets in the next few months, or convert them into an income trust. These operations supply a quarter of total…

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