The Globe and Mail reports in its Thursday, Oct. 27, edition that buying shares of a stock on
weakness can prove to be a
successful portfolio management
strategy. The Globe's Jennifer Dowty writes that it is critical
to determine whether price
weakness is indeed a buying opportunity. Hydro One has come under pressure in recent weeks and may prove to be trading at a good entry point for long-term investors. Interest-sensitive utilities stocks
such as Hydro One have been
under pressure. This stock offers
investors two attractive attributes:
steady growth and dependable
income. The company
is a dominant player in the Ontario
electric transmission and
distribution businesses. Its operations
are rate-regulated, representing
99 per cent of total
revenue, providing the company
with high earnings visibility and
reliability. The company's earnings
are growing at a steady pace.
Looking out to 2020, the rate
base is forecast to grow at a
compound annual growth rate
of 4.9 per cent. The dividend
yield of 3.4 per cent is attractive,
with room to expand the quarterly
dividend given the conservative
payout ratio. Ms. Dowty says the low $24
price level looks like an attractive
entry point.
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