During the past ten-year period, the first annual payment was CA$0.70 in 2010, compared to CA$1.74 last year. While we're not hugely bearish on it, overall we think there are potentially better dividend stocks than Canadian Utilities out there.Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. 2 Future Dividend Kings to Hold Forever. There is, however, a significant risk that the pace of Fortis is the Canadian publicly listed company with the second longest history of consecutive dividend increases, having increased its dividend every year for the past 45 years. With management targeting a lower increase in the distribution relative to growth in FFO the payout ratio could also decline somewhat. Fortis is expected to yield 3.73% for FY2018 and targets an average annual dividend growth rate of 6% per annum through 2023. Canadian Utilities is a holding company. Wind, down in Uruguay is an area of interest. The first two utilities to be discussed in this article are Canadian Utilities (Canadian Utilities has the longest record of consecutive dividend increases of any Canadian stock, having increased its dividend every year for the past 47 years. The rate at which earnings have grown is quite decent, and by paying out more than half of its earnings as dividends, the company is striking a reasonable balance between reinvestment and returns to shareholders.Dividend investors should always want to know if a) a company's dividends are affordable, b) if there is a track record of consistent payments, and c) if the dividend is capable of growing.
High Dividend: CU's dividend (5.07%) is low compared to the top 25% of dividend payers in the Canadian market (5.93%). With a FY2018 PE Ratio of around 15.4 also being the lowest of the Canadian utilities discussed in this article, the stock also seems reasonable from a valuation perspective. The company is also focused on markets with significant potential for growth in electricity demand such as Brazil where residential electricity demand has been The utility is also well-diversified, with management indicating that no more than 30% of its portfolio would in general be exposed to one particular geographical area. I therefore consider the dividend at Fortis to be safe, and management's dividend growth forecast also seems highly realistic.Emera is expected to yield around 5% in 2018 with a payout ratio of around 76.9% as can be seen this is slightly lower than the payout ratio for Canadian Utilities but higher than the payout ratio at Fortis. Interestingly, water desalination, believe it or not, in the U.S has legs in California.
I am not therefore currently concerned with the dividend safety of Emera and consider a slow and steady dividend growth rate of 4-5% to be very reasonable.Much like the utilities discussed above, Emera is focused mainly on its regulated utility business where it generates more than 80% of its earnings. Overall this nevertheless remains a strong utility with good dividend growth potential.It can thus be said that each of these utilities has the potential to continue growing their dividends in the near future. During this period the dividend has been stable, which could imply the business could have relatively consistent earnings power. So we need to form a view on if a company's dividend is sustainable, relative to its net profit after tax. It must be cautioned that although utilities generally perform better than the broader market, in times of market uncertainty there are no guarantees and not all utilities are created equal. Today we'll take a closer look at Canadian Utilities Limited from a dividend investor's perspective.Owning a strong business and reinvesting the dividends …
This is a fairly normal payout ratio among most businesses. The Florida Public Service Commission has also approved a solar base rate adjustment for the second tranche of Emera's investment, into solar power in Tampa, which allows for the adjustment of customer rates for the full cost recovery as soon as these projects are placed into service. This is particularly impressive considering that until 2012 Fortis had been focused mainly on Canada with the majority of its US operations being acquired in the period between 2013 and 2016.
Paying out more than 100% of your free cash flow in dividends is generally not a long-term, sustainable state of affairs, so we think shareholders should watch this metric closely. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Adjusted regulated earnings currently makes up around 99% of total adjusted earnings, which together with a slow but steady growth in the utility's rate base enhances the stability of the dividend.Canadian Utilities' rate base has increased by around 45% on a cumulative basis since 2013 and is expected to continue growing at a pace of around 4-5% per annum.
Were it to repeatedly pay dividends that were not well covered by cash flow, this could be a risk to Canadian Utilities's ability to maintain its dividend.As Canadian Utilities has a meaningful amount of debt, we need to check its balance sheet to see if the company might have debt risks. The valuation of EMRAF in particular also seems reasonable at current levels. Canadian Utilities paid out 52% of its profit as dividends, over the trailing twelve month period. It allows a higher dividend to be paid to shareholders, but does limit the capital retained in the business - which could be good or bad.We also measure dividends paid against a company's levered free cash flow, to see if enough cash was generated to cover the dividend. The completion and putting into operation of the first tranche of its solar operations in Florida in September 2018 will form part of a much larger planned solar operation in the state of Florida.
Please be aware of the risks associated with these stocks.Value, financial industry, utilities, foreign companiesI wrote this article myself, and it expresses my own opinions. Stock analysis for Canadian Utilities Ltd (CU:Toronto) including stock price, stock chart, company news, key statistics, fundamentals and company profile. First, we think Canadian Utilities has an acceptable payout ratio, although its dividend was not well covered by cashflow.