The Globe and Mail reports in its Wednesday edition that Fortis ($44.24) has delivered steady growth in earnings
and dividends, with gradual
increases in the share price, too. The Globe's John Heinzl writes that Fortis has one of the longest dividend-growth records for a Canadian
company, having increased
its annual payment for 43 consecutive
years. Fortis has said it
aims to raise its dividend at an
annual rate of 6 per cent through
2021. Fortis currently pays $1.60
a share annually, for a yield of
3.6 per cent. Assuming it achieves its growth target, the
dividend will climb to $2.14 by
2021. Fortis has a long record of successful
acquisitions. In addition to growing through
acquisitions, Fortis also invests in
its existing operations to raise its
rate base -- the value of assets on
which a utility is permitted to
earn a regulated rate of return. Edward
Jones analyst Andy Smith says "Given that a regulated utility is
allowed to earn a return on its
asset base, we expect these
investments to translate into solid
earnings growth." He rates Fortis "buy."
Rising earnings, in turn, will
support Fortis's dividend-growth
plans. Fortis is trading at
about 17 times estimated 2017
earnings.
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