The Globe and Mail reports in its Wednesday, Sept. 17, edition that Kaspardlov,
Laverty and Associates chief investment strategist Pat McHugh recommends buying Canadian Utilities ($39.74). The Globe's John Heinzl writes in the Yield Hog column that Canadian Utilities offers a yearly yield of 2.7 per cent. It has a three-year annualized dividend growth rate of 9.7 per cent. Canadian Utilities' energy infrastructure
assets -- including gas
and electric utilities, pipelines
and power generation plants --
throw off predictable and growing
cash flows, which has
allowed the company to raise its
dividend every January (and
sometimes more often) for more
than 20 years. Mr. McHugh calls Canadian Utilities "a cash
machine." Mr. McHugh says rising
interest rates pose a potential
threat to utility stocks, but a
growing dividend can help to
cushion the blow. With interest rates at historic lows and many companies phasing out defined benefit pension plans, Mr. McHugh argues that a portfolio of dividend-growing stocks can provide a relatively safe and predictable stream of cash to supplement other sources of income in retirement.
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