# Best Utility stock on TSX



## gibor365 (Apr 1, 2011)

My portfolio is very diversified, but I still don't own any Utility...when I searched some of them couple of months ago , they were very expensive...

What in your opinion Best Utility stock on TSX?


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## Cal (Jun 17, 2009)

The best utility stock or the best current price?

I like Fortis and Emera, but I don't like the current prices.


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## FrugalTrader (Oct 13, 2008)

I like/own small positions in Fortis, Emera and Canadian Utilities.


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## Eder (Feb 16, 2011)

My fav is Fortis and has done well for me dividend and capital gain wise. It looks expensive and if interest rates increase it will drop to more attractive levels. With a few on Wall Street predicting the 10 year bond to drop under 3% yield it might be a good time to buy Fortis now.

Dont ask me why they bought some hotels a few years ago....was/is weird and I wish they would dump that crap.


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## gibor365 (Apr 1, 2011)

Cal said:


> The best utility stock or the best current price?
> 
> I like Fortis and Emera, but I don't like the current prices.


Combination of best utility stock or the best current price 

What do you think about JE?


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## Argonaut (Dec 7, 2010)

gibor said:


> Combination of best utility stock or the best current price
> 
> What do you think about JE?


I like JE a lot, it's a (relatively) rare case of a stock with a high yield that has no debt problems. The only issue is earnings growth, but what it does offer is a nice sustainable yield and that's usually what one looks for in a utility. Perhaps I would own Fortis instead if I had a larger and more conservative portfolio.


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## daddybigbucks (Jan 30, 2011)

Re:JE

ugh- no debt problems?

They owe more than they own. Equity is negative.

They look to be digging a hole.


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## Argonaut (Dec 7, 2010)

daddybigbucks said:


> Re:JE
> 
> ugh- no debt problems?
> 
> ...


Hmm, you may be right. Before I had looked at this:
http://www.reuters.com/finance/stocks/financialHighlights?rpc=66&symbol=JE.TO
And this: http://www.stockchase.com/Company-sl--slq-ID-slv-Just--Energy--Group.php

But looking elsewhere, the Globe & Mail says they do have large debt. What to believe?


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## HaroldCrump (Jun 10, 2009)

Argonaut said:


> But looking elsewhere, the Globe & Mail says they do have large debt. What to believe?


Their balance sheet shows they have substantial debt.

Refer:









And the debt appears to get getting worse - there was a huge jump in 2010.
They also seem to have issued a lot of common stock in 2010.

I haven't looked deeper, but there may be something smelly in there.


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## zylon (Oct 27, 2010)

*sometimes cheap is expensive and vv*

By nature, I like to bottom fish, and in the case of Utilities that strategy has worked out PDW (pretty darn well).

However, after a correction, I always wonder if buying the one which dropped the LEAST would be the best one to buy. ie, buy the strongest one.

Below is the TSX Utilities Index with components sorted by month. Most of the "4 stars" show positive % change in all time frames. Immunity to corrections is a very good thing.


(click on image to enlarge)


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## HaroldCrump (Jun 10, 2009)

While not a utilities pure-play, TransCanada (TRP) has done very well in the last few years.
It has been one of my most stable performers.
It appears overbought right now, so I'll look to add to my long position only in the event of a general market correction.
It is also interest rate sensitive, although not as much as some of the other ones like Enbridge, so it's worth watching later this year if/when interest rates rise.


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## Causalien (Apr 4, 2009)

JE's income, balance and cash flow all show red flags. Hence not a good fundamental play or anything approaching safe for "income" type investment.

Look at the cash flow the actual operating income that translated into income from operating activities is peanuts. There's also a suspicious non-cash item line.

The only positive cash flow is from financing activities, which tells us that they are issuing debt to sustain itself. This company is headed for a blowup.


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## daddybigbucks (Jan 30, 2011)

HaroldCrump said:


> .
> It has been one of my most stable performers.
> It appears overbought right now, so I'll look to add to my long position only in the event of a general market correction.
> .


i agree 100%.

I recently bought TRP at $36 and thought that was high but at 5% yield, i was just going to hold long anyways.
It went up 10% since then, so suffice to say, im very happy.

Everything is looking up for TRP right now. I would buy more too if it had a correction but until Keystone XL is settled, i think its going to run high/stay high on speculation.

even though its tough, i think utlilites and yield stocks are at a high right now so i would just HOLD. It might be the time to buy junior miners as most are taking a big hit.

AVM is my favorite as they will have copper mine coming on line this quarter.


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## gibor365 (Apr 1, 2011)

Yes, TRP is nice, wanted to buy it about 3 months ago and did a big mistake that didn't buy. But now it almost touching 52 weeks high...
Did quick review of Canadian Utilities....the most attractive to me looks EMA, but also is pretty expensive... 

BTW, is anyone holding US Utilities?


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## HaroldCrump (Jun 10, 2009)

It's been a while since I've looked at Emera, but I don't like it at all.
I'd rather pay the price premium for FTS vis-a-vis Emera.

Sometimes it's worth paying for quality and stability.
TRP proves that as well.


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## webber22 (Mar 6, 2011)

Utilities have done well for the past decade because interest rates were falling. If rates start to rise and inflation sets in, and all indications point to this, utilities will not do as well since they are regulated. Perhaps the yields of 4% will not look so hot later on ...


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## Argonaut (Dec 7, 2010)

Thanks Harold and Causalien.. I will switch my JE to FTS. I will also discontinue my use of Reuters for analysis.


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## Financial Cents (Jul 22, 2010)

I like and own small positions in EMA, FTS, ENB, TRP and TA.

My Own Advisor


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## gibor365 (Apr 1, 2011)

webber22 said:


> Utilities have done well for the past decade because interest rates were falling. If rates start to rise and inflation sets in, and all indications point to this, utilities will not do as well since they are regulated. Perhaps the yields of 4% will not look so hot later on ...


Yes, you have a point. Probably combination of current high utilities prices and very posible interes rates increase, doesn't give a good reason to buy any utilities at all....


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## gibor365 (Apr 1, 2011)

What do you think about ZUT BMO Equal Weight Utilities , 5% yield
Holdings:
Brookfield Renwbl Pwr Fnd	7.17%
Capital Power Income L.P.	6.81%
Algonquin Power & Utility	6.79%
Capital Power Corp	6.71%
Cdn Utilities Cl A NVS	6.68%
Just Energy Group Inc	6.67%
Pembina Pipeline Inc	6.65%
ATCO Ltd Class I	6.59%
Atlantic Power Corp	6.52%
Northland Power Inc	6.45%
Innergex Renewable Energy	6.38%
Capstone Infrastructure	6.31%
Emera Inc.	6.22%
TransAlta Corp.	6.18%
Fortis Inc.	5.96%
Ram Power, Corp.	1.54%


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## atrp2biz (Sep 22, 2010)

What is a utility?

To me, a utility is a company with substantial infrastructure and capital investments. In addition, much of the revenue is regulated. A lot of companies discussed are exposed to regulatory risk. JE is an energy retailer--I could be wrong, but I don't think it owns any energy infrastructure assets. I wouldn't consider it a utility. Capital Power is starting to get into merchant power plays--ever since the spin off from EPCOR, it is becoming more "unutility" like with each investment (re: Calpine). 

Just be careful that not all utilities are the same and they don't all necessarily have low betas.


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