I do not own this stock (TSX-CU). You would not want to own this company and ATCO because of their close relationship. This is another utility company and it is considered to be well-managed. The Dividend Yield is at 3%. The Dividend Payout Ratios (DPRs) are good on this stock at 41% of earnings and 23% of cash flow.
When I look at insider trading, I find some $4.6M of insider selling with a net insider selling of $4.3M. All insider selling occurred last year. The bit of insider buying occurred this year. Insider selling was by CEO, Officers and Directors. CU is also in the process of buying non-voting shares for cancellation.
Both the CEO and CFO have more options than shares. Also, The ATCO holdings in this company are half in voting shares and half in non-voting shares. The own just over 50% of this company. There are only 5 institutions owners in shares of this company and they own around 4.5% of the company. Over the past 3 months, they are marginally increased their shares.
I went to check the share price today because of this big drop in the markets of yesterday and today. I did not update my spreadsheet as the price marginally increased. Sometimes utility stocks hold up well in downturns and they are thought of as safe and stable.
I get a 5 year median Price/Earnings Ratios of 12.25 for the low and 15.79 for this high. The current P/E Ratio of 15.45 is close to the high. I get a Graham Price of $44.04 and a current stock price of $55.63. The current stock price is some 26% above the Graham Price. The average high difference between the Graham Price and the Stock price is 21%, so by this measure, the stock price is high.
The current dividend yield is 2.89 and the 5 year median dividend yield is 3.12 and this also points to a relatively high price. The last thing to look at is the Price/Book Value Ratio. The 10 year median P/B Ratio is 1.90 and the current one is 2.32, some 22% high. I note that the Book Value under the new account rules decrease by 8%. If we use the Book Value from the end of 2010, under the old accounting rules, the P/B ratio would still be higher at 2.14 by 12%. This also shows a relatively high current stock price.
When I look at analysts’ recommendations, I see Strong Buy, Buy and Hold. The consensus recommendation would be a Buy recommendation. (See my site for information on analyst ratings.) I note that Buy recommendations come with a 12 month stock price of $60.25 and the Strong Buy comes with one of $66.00.
One analyst sees strong growth ahead for this stock. One analyst points out this is a safe and steady stock. Another analyst likes that this company is in Alberta and it should revive as Alberta does. This is considered to be a Blue Chip stock. The 2nd Quarterly results are in, but not the full accounting records. The 2nd Quarterly earnings were higher than analyst’s estimates.
As you can see from the results today, that this stock holds up quite well in bear markets. One analyst remarked that it should be the corner stone of a value portfolio and I agree. This is a good utility stock. I will not be buying it as I already have enough utility stocks. Over the years, I have made most of my money from utility stocks and bank stocks.
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 (ACO.X) owns just over 50% of this company. CU.X is voting and Class B, CU is non-voting and Class A. Its web site is here CU. See my spreadsheet at 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 for stocks followed and investment notes. Follow me on twitter.
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