One Canadian large-cap name we like at this time that fits the bill is Fortis Inc. (TSX:FTS). Fortis shares are down year to date and are off more than 10% over the past 52 weeks, but that has pushed its dividend yield north of 4% [now 3.6%] for the first time in almost a year.
[Please click here to get immediate access to curated research in the weekly Capital Ideas Digest with our free 30-Day Trial.]
[Editor’s Note: Shares of Fortis have gained about 24% since Capital Ideas wrote about the company 15 months ago.]
As a regulated utility, the Company’s cash flow is among the most predictable of any business, which has given Fortis confidence to target 6% annual dividend growth annually through 2025.
The Company also has a payout ratio of just 74%, which gives it room to increase its dividend even more, and its stock is currently trading at a price-to-book ratio of only 1.36.
As well, Fortis has a carbon emissions reduction target of 75% by 2035, which should make its shares more appealing to ESG investors, both retail and institutional.
And, Fortis has an enviable long-term track record of generating an average annual return for its shareholders of about 13% over the past 20 years.
To read our full disclosure, please click on the button below:
The Content contained on this page (including any facts, views, opinions, recommendations, description of, or references to, products or securities) made available by SmallCapPower/Ubika Research is for information purposes only and is not tailored to the needs or circumstances of any particular person. Any mention of a particular security is merely a general discussion of the merits and risks associated there with and is not to be used or construed as an offer to sell, a solicitation of an offer to buy, or an endorsement, recommendation, or sponsorship of any entity or security by SmallCapPower/Ubika Research. The Reader should apply his/her own judgment in making any use of any Content, including, without limitation, the use of any information contained therein as the basis for any conclusions. The Reader bears responsibility for his/her own investment research and decisions. Before making any investment decision, it is strongly recommended that you seek outside advice from a qualified investment advisor. SmallCapPower/Ubika Research does not provide or guarantee any financial, legal, tax, or accounting advice or advice regarding the suitability, profitability, or potential value of any particular investment, security, or information source. Ubika and/or its affiliates and/or their respective officers, directors or employees may from time to time acquire, hold or sell securities and/or commodities and/or commodity futures contracts in certain underlying companies mentioned in this site and which may also be clients of Ubika’s affiliates. In such instances, Ubika and/or its affiliates and/or their respective officers, directors or employees will use all reasonable efforts to avoid engaging in activities that would lead to conflicts of interest and Ubika and/or its affiliates will use all reasonable efforts to comply with conflicts of interest disclosures and regulations to minimize the conflict.