Canadian Utilities 2

I am continuing my review this stock (TSX- CU) today as I received the December 2008 annual report and I have not reviewed it since I received this report. I do not own this stock, but I follow it. They are on the dividend lists that I follow. For links to these dividend lists, see yesterday’s blog.

When I look at Insider Selling and Insider Buying reports, the thing I notice is that the CFO and CEO have more options that stock. For the Officers and Directors, the number of options and shares are close. Over the past year, there has been almost 4M of Insider Selling. Most of this occurred in the first part of this year, and most of this selling was done by Directors. However, there was not just one person selling, but a number of people selling.

When you look at Insider Selling, it is hard to know whether or not it is pointing to a lack of confidence in the company or not. We were in a recession in the first part of this year. The thing that points to the company having confidence is that they increased their dividends this year by 6%.

When I look at the P/E, I find that the 5 year low was 12.6 and the 5 year high was 17.5. The P/E for the expected earnings this year is 14.3. The P/E on sites that look at it from a last 12 months earning’s point of view is just over 11. So the P/E for this stock is relatively low. When looking at the yield, I find that the current one is 3.3% and the 5 year average is 3%. So this yield is slightly better than the 5 year average. The Price/Book Value at 1.79 is just less than 90% of the 10 year average of 2.05. The last thing to look at is the Graham Price. The current price is just 6% higher than the Graham Price. All these items point to a good, but not great, current stock price.

Globe investor gives this stock a 3 star rating. When I look at analysts’ recommendations, I find a Strong Buy and Buy and Hold recommendations. The consensus recommendation will be a Buy. (See my site for information on analyst ratings.)

This is a good utilities stock and it should provide good solid returns over the long term. I follow this stock, as it is on the dividend list that I follow. I have no intentions of buying it, as I am happy with the utilities stocks I currently own.

Canadian Utilities Limited operates in four business segments: regulated natural gas operations; regulated electric operations; technologies; and power generation. These operations provide service to industrial, residential and commercial customers. Other businesses consist of natural gas gathering, processing, storage and natural gas supply management and technical facilities management. ATCO owns 74% of this company. CU.X is voting and Class B, CU is non-voting and Class A. Its web site is www.canadian-utilities.com. See my spreadsheet at www.spbrunner.com/stocks/cu.htm.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html.