Alberta’s woes won’t hurt their payouts

Article Excerpt

Canadian Utilities and its parent company, ATCO (see box), are both down 10% since the start of 2015. That’s mainly because lower oil prices have prompted companies that produce and explore for crude to put off new projects, hurting electricity demand in Alberta. However, both firms are in the midst of expansions that will spur their earnings as oil prices recover. That will give them more room to increase their dividends. CANADIAN UTILITIES LTD. (Toronto symbols CU [class A non-voting] $37 and CU.X [class B voting] $37; Income Portfolio, Utilities sector; Shares outstanding: 265.2 million; Market cap: $9.8 billion; Price-to-sales ratio: 2.9; Dividend yield: 3.2%; TSINetwork Rating: Above Average; www.canadian utilities.com) distributes electricity and natural gas in Alberta and Australia. It also operates 18 power plants in Canada, Australia and the U.K. ATCO Ltd. owns 53.2% of the company. Between 2015 and 2017, Canadian Utilities plans to spend $5.8 billion on its utility operations, including building a 485- kilometre power…