Utility stocks are generally great businesses for one specific reason: steady and predictable cash flows. There are various regulations in place that protects incumbents, and the capital-intensive nature of the business places heavy barriers to entry. In addition to this, every human uses utilities in some form or another. It is due to these factors that utilities pay good dividends, and today we have identified a few stocks that provide a good yield at what we think is a discounted price.
Just Energy Group Inc. (TSX: JE) – $6.07
Natural Gas Utilities
Just Energy Group Inc., is a Canada-based commercial energy retailer. The Company is engaged in selling electricity and natural gas to residential and commercial customers under long-term fixed-price, price-protected as well as variable-priced contracts in deregulated markets. The Company’s core business is energy marketing. The Company also offers the rental and sale of water heaters, furnaces, air conditioners and smart thermostats through National Home Services.
- Dividend Yield: 8.2%
- EV/Sales: 0.4x
- P/E: 6.6x
- EV/EBITDA: 8.3x
Caribbean Utilities Co Ltd. (TSX: CUP.U) – $13.38
Electric Utilities
Caribbean Utilities Company, Ltd. (CUC) is engaged in the generation, transmission and distribution of electricity in its license area of Grand Cayman, Cayman Islands. The Company provides this service pursuant to a 20-year transmission and distribution license, and a 21.5-year generation license granted by the Cayman Islands Government, which expires in April 2028 and September 2029, respectively. It has an installed generating capacity of approximately 150 megawatts, eight transformer substations, approximately 438 miles of land-based high-voltage transmission and distribution lines and 15 miles of high-voltage submarine cable.
- Dividend Yield: 6.1%
- EV/Sales: 2.4x
- P/E: 16.0x
- EV/EBITDA: 11.0x
Nova Scotia Power Inc. (TSX: NSI.PR.D) – $25.70
Electric Utilities
Nova Scotia Power Incorporated (NSPI) is a fully-integrated regulated electric utility and the primary electricity supplier in Nova Scotia, Canada, providing electricity generation, transmission and distribution services. NSPI is the operating subsidiary of Emera Incorporated (Emera). NSPI is the primary electricity supplier in Nova Scotia, providing electricity generation, transmission and distribution services in the Province to approximately 504,000 customers.
- Dividend Yield: 5.7%
- EV/Sales: 1.7x
- P/E: 22.8x
- EV/EBITDA: 3.8x
