Thread Rating:
  • 0 Vote(s) - 0 Average
  • 1
  • 2
  • 3
  • 4
  • 5
Utilities sector
NEE overvalued forever and keeps delivering CAP and div gains. I would like to see them put up some new earnings growth this year to justify the price.
Anyone have Canadian Utilities? Or their parent company ATCO?

Particularly looking at CU here, seems fairly priced, super well diversified and while dividend growth has been kinda slow, the starting yield is pretty impressive at 5.8%. I haven't had the time to take a proper look yet though, so there might be something I'm missing.
I am not knowledgeable enough in Canada regulations to have a strong opinion. I don't prefer my UTEs have much exposure to commodity price swings either. I leave those for Eric to understand. I tend to stick with my US favorites for utilities. I want this part of port to be boring and steady.
Finally listened to all the year end earnings reports. The industry is truly moving fast. I listened to ALE-XEL-WEC calls back to back lol.

I was particularly impressed with WEC. They may exceed their 7% growth rate goal (EPS and DIV) by next year. I like their management and they exude confidence they can capitalize on the near term changes in energy policy. I think I like the risk reward vs NEE at this time due to valuation. They have no intention of eliminating natural gas from their Northland mix without a huge technological advancement that is likely a decade away or more.

XEL is in good shape as well. Both expecting to hit 70% of their 2050 goal by 2030. That is considerably ahead of schedule. They are purchasing some wind assets from ALE this quarter. 5-7% growth projections. Same on natty gas. I think they were both reading the same slide with the identical concerns. Smile Token move towards EV infrastructure in progress. XEL and WEC both stated supporting industry fleet vehicle recharging was a near-term project if it picks up momentum with their industrial customers.

I was less inspired by ALE immediate future. Their region's economy (regulated portion) is just not going to awaken from Covid quite as fast. I got the impression 5% growth was going to be a challenge. They are already at 50% renewables though and intend 70% by 2030. They have no solar yet but that is clearly their next move. This will probably be the only UTE I'll continue to attempt to trade as it is volatile within a modest range. Not meaningfully building this position unless it pulls back hard.

My DUK and XEC positions may be transferred to the above. I need to do a deeper dive into AEP as that position is pretty large. They are nowhere near as far down the transition path to renewables last time I researched.
I appreciate the research. Sounds like I can start with WEC, XEL, and NEE.
(03-11-2021, 10:13 AM)ken-do-nim Wrote: I appreciate the research.  Sounds like I can start with WEC, XEL, and NEE.
I'm confident enough to make them core holdings as I get real close to actual retirement.  I'll keep an eye on them for you.  Do yourself a favor and pull up a 10 yr chart on your brokerage software.  Compare these three with a couple higher yield today low growth UTEs like ED and DUK.  ED and DUK are solid, but I don't need that extra couple bucks in dividends now and give up the share price runs.  I am up 10X on XEL pre-merger.  Eric put me on to WEC and half talked me into NEE several years ago.  These aren't UTEs for 80 yr old men.  They are true DGI stocks.  They outperform some of my DGI stocks and I expect that might continue.    

I can't know if rates will rise and UTEs get hit more, but they are way down off their highs.  Just average in and maybe DRIP them.  I doubt you will regret it.  Sometimes they go up on days your high growth is getting whacked.  That's not a terrible thing IMO.
Fenders, what's your view on NRG? Trading pretty cheap here.
I stick to my faves in this sector. I don't follow it NRG close enough to give advice.
I agree stick to the good name utilities. Don’t even fool around with NRG.
(03-18-2021, 06:42 AM)divmenow Wrote: I agree stick to the good name utilities. Don’t even fool around with NRG.
There are 6-8 consistently great UTEs in the US.  Lean current dividend or growth, your choice.  I'll save my stress trades for other sectors that aren't so stable.

Users browsing this thread: 2 Guest(s)