I first bought this stock (TSX-FTS) in 1987. I bought more in 1995 and 1998. I sold some in 2005, as this stock was relatively too much for my portfolio. My total return on this stock is 13.4% per year. For the shares I bought in 1987, my total return is 13.5% per year. Dividend yield would be in the 4 to5% range over this period of time.
When I look at the Insider Trading, I find some $5.4M of selling. Just over half of the selling is by the CFO. There is some buying, but it is too minor to mention. As with a lot of companies with stock options, all but the directors have lots more stock options than shares.
The CEO has some $14.5M in stock and some$28.7M in options, currently. The CFO has some $3.5M in shares and $8.9M in options, currently. However, in my reviews of 2009 and 2010 I found very small amounts of buying and selling. So, we are not really seeing a pattern here. However, I still do like it that large companies have insiders with more stock options than shares.
According to Reuters, there are 114 institutions that own 22.8% of Fortis stock. Over the past 3 months, there has been net buying of 136,000 shares, but 3 less buyers. So there are net institutional buyers of $4.5M of this stock, which is a $5.8B company. We are talking about less than 1% of this company, so this is a small change compared to the amount owned by institutions.
When I look at 5 year median Price/Earnings Ratios, I get a low of 15.5 and a high of 20.8. I get a current P/E Ratio of 19.1, which would be just over the median P/E towards to high side. I get a Graham Price of $27.62 and the current stock price of $33.24 is 20% higher. The 10 year median difference between the Graham Price and the stock price is 16%, so this would point to a rather high current price.
The 10 year median Price/Book Value Ratio is 1.73 and the current P/B Ratio is slightly lower at 1.71. This current ratio points to a reasonable, but not great current stock price. The 5 year median dividend yield is 3.74% and the current dividend yield is 3.49%. This current dividend yield does point to a higher than median stock price.
Another thing to look at is what the future dividend increases would be on this stock. I find that it is hard to judge. Yes, the dividend increase for the last 5 and 10 years are 13.7% and 9.3%, but ones for 2006, 2007 and 2008 at 14%, 22% and 22% are high by historical increases as far as I can see.
I only have increases back to 1988. For my spreadsheet, I picked 5% per year increases. Humans, I am told are bad on judging what the future holds, so who knows. Read “The Black Swan” by Nassim Nicholas Taleb for an interesting take on future telling by humans.
When I look at analysts’ recommendations, they are all over the place, including Strong Buy, Buy, Hold, Underperform and Sell recommendations. However, the vast majority give a Hold recommendation. The consensus would be a Hold. (See my site for information on analyst ratings.) My spreadsheet points to a relatively high current stock price.
Analysts mentioned the good first quarter of 2011 and think it is a very good start for this year for Fortis. A buy comes with a $36, 12 month stock price and a hold comes with a $34, 12 month stock price. Some Holds just think the current price and P/E Ratio are too high. Another Hold says that we are going to have inflation and this will be a problem for Fortis as most of their operations are regulated.
There is mention that this company has consistently raised their dividend for each of the past 38 years. This is a great record. Fortis is thought of as a low risk, well-managed utility.
I am certainly holding on to what shares I own in this company. This has been a very good investment for me. I will not be buying any more as I simply have enough. I do not let any single investment get to large relative to my portfolio.
The Daily Buy Sell Advisor talks about Fortis at the bottom of this Buy Sell Advisor page. This advisor thinks that Fortis is a good stock and likes it for it diversity of investments. Oilweek Magazine talks about Fortis having a good first quarter in 2011.
Fortis is a diversified, international distribution utility holding company. Its regulated holdings include electric distribution utilities in five Canadian provinces and three Caribbean countries and a natural gas utility in British Columbia. Fortis owns and operates non-regulated generation assets across Canada and in Belize and Upper New York State. It also owns hotels, commercial office, and retail space primarily in Atlantic Canada. Its web site is here Fortis. See my spreadsheet at fts.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 for stocks followed and investment notes. Follow me on twitter.
Nice post. Again, great details.
FTS is one I am just starting my full DRIP with.
Did you read this news?
Great stuff I think :)