Fortis (Symbol-FTS)

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Re: Fortis (Symbol-FTS)

Post by $seeker »

@Justice

Did the utilities index include dividends or was this the change in initial investment only?
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Re: Fortis (Symbol-FTS)

Post by ig17 »

Justise wrote:I tracked this stock but I am lucky not buying/owing this one. Though past history is not necessary an indication of future trend but I believe also a case can be made not to buy this stock if the past trend is any indication of 'statistical significance". The followings are 3 years and 10 years performances of:

TSX Capped Utilities Index TTUT vs TSX60, TSX, ^TTRE respectively

3yrs -8% vs 2%, 1%, 19%

10yrs 32% vs 71%, 66%, 60% (also notable ^RTCM 46%, ^TTFS 74%)
These numbers don't tell the whole story. Have you thought about risk? Utilities are defensive, bond-like stocks. The sector is more recession proof than market as a whole.

You seem to like restaurant royalty stocks. Suppose you lose your job in recession. Which expense will you cut first? A Friday night out at a pizza place, or your hydro bill?

Warren Buffet famously said: "The electric utility business, it's not a place to get rich, but it's a place to stay rich and that's the way we look at it. And yes, I like to stay rich."
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Re: Fortis (Symbol-FTS)

Post by JaydoubleU »

Warren Buffet famously said: "The electric utility business, it's not a place to get rich, but it's a place to stay rich and that's the way we look at it. And yes, I like to stay rich."
That has been my thinking exactly the past few months as I consider different ways of protecting the enormous gains of the portfolio over the past five years.
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Re: Fortis (Symbol-FTS)

Post by Justise »

$seeker wrote:@Justice

Did the utilities index include dividends or was this the change in initial investment only?

All indexes are changes on initial investments only.
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Re: Fortis (Symbol-FTS)

Post by Justise »

ig17 wrote:
Justise wrote:I tracked this stock but I am lucky not buying/owing this one. Though past history is not necessary an indication of future trend but I believe also a case can be made not to buy this stock if the past trend is any indication of 'statistical significance". The followings are 3 years and 10 years performances of:

TSX Capped Utilities Index TTUT vs TSX60, TSX, ^TTRE respectively

3yrs -8% vs 2%, 1%, 19%

10yrs 32% vs 71%, 66%, 60% (also notable ^RTCM 46%, ^TTFS 74%)
These numbers don't tell the whole story. Have you thought about risk? Utilities are defensive, bond-like stocks. The sector is more recession proof than market as a whole.

You seem to like restaurant royalty stocks. Suppose you lose your job in recession. Which expense will you cut first? A Friday night out at a pizza place, or your hydro bill?

Warren Buffet famously said: "The electric utility business, it's not a place to get rich, but it's a place to stay rich and that's the way we look at it. And yes, I like to stay rich."

Sad to tell you that these numbers tell the whole story. You mentioned that utilities are bond-like which I agree. Bonds have been on a 30 year bull run, and TTUT for the last 10 years should also similarly enjoy at least 9 years of bond-like bull run. Now the tide has turned for bonds and so are for utilities. But for some 9 years interest rates declines benefitting both bonds and utilities and REITS, TTUT trailed very badly as compare to ^TTRE (REITs), ^TTFS (financial services), ^RTCM. For 10 year total return, ^TTRE and ^RTCM will leave TTUT much further behind since both have much higher dividends than TTUT.

The catch is WHEN Warren Buffet made those statements. When the tide turns, the 3 year results I posted showed up and so are the 10 year results. As Warrant Buffett also said, "It is only when the tide goes down, you know who is swimming naked."
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Re: Fortis (Symbol-FTS)

Post by Taggart »

I still own Fortis in the portfolio, but as long as the company can continue to increase it's dividend annually, then the term "clunker" never enters my mind.

------------------------------

My portfolio clunker: Why I’m hanging on to Fortis stock

JOHN HEINZL
INVESTMENT REPORTER — The Globe and Mail
Published Tuesday, Mar. 25 2014, 7:47 PM EDT
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Re: Fortis (Symbol-FTS)

Post by Springbok »

$seeker wrote:@Justice

Did the utilities index include dividends or was this the change in initial investment only?
Are there Total Return numbers for the indices that were compared?

The value of the actual utility stocks or the utility index is not that important unless owner is a trader. For those of us who are more interested in income, it makes beans of difference if our portfolio value goes down or up, so long as the income is stable and hopefully grows over time. I have a small holding in Fortis and will likely hold it for a long time.
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Re: Fortis (Symbol-FTS)

Post by pullingpitch »

Fundamental analysis beginner here and I'm trying to make sense of the income statement for Fortis.

Google Finance shows the net income as 410M in 2013 and 362M in 2012 while Fortis's 2013 annual report shows net income as 420M and 371M for the same years respectively. This seems to be due to the fact that Fortis treats the minority interest/non controlling interest as a positive value while Google treats it as a negative value. Why is that?
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Re: Fortis (Symbol-FTS)

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Sic transit gloria mundi. Tuesday is usually worse. - Robert A. Heinlein, Starman Jones
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Re: Fortis (Symbol-FTS)

Post by 2 yen »

Shakespeare wrote:Canada’s Fortis bulks up in U.S. with $6.9-billion ITC deal - The Globe and Mail
One of my holdings (2% of total portfolio).

This is great news. First getting rid of the hotels and now this very positive purchase.

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Re: Fortis (Symbol-FTS)

Post by jay »

FTS down 7.5% and ITC 1.5%?

First time I see both the buyer and seller down. What to make of this? Deal already priced in and FTS shareholders not happy?
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Re: Fortis (Symbol-FTS)

Post by bpither »

Sell first, ask questions later ...
FTS and CU dividend aristocrats with over 40 consecutive years of dividend growth. Hope the former keeps dropping so I can pick up more but CU would be the greater prize if it gets to $29 again.
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Re: Fortis (Symbol-FTS)

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jay wrote:FTS down 7.5% and ITC 1.5%?

First time I see both the buyer and seller down. What to make of this? Deal already priced in and FTS shareholders not happy?
FTS is paying a premium. Perhaps Mr. Market doesn't like the premium. Not quite sure how purchases like this can be done without paying a premium.

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Re: Fortis (Symbol-FTS)

Post by BRIAN5000 »

2 yen wrote:
jay wrote:FTS down 7.5% and ITC 1.5%?

First time I see both the buyer and seller down. What to make of this? Deal already priced in and FTS shareholders not happy?
FTS is paying a premium. Perhaps Mr. Market doesn't like the premium. Not quite sure how purchases like this can be done without paying a premium.

2 yen
Market cap of ITC is 6 bill and FTS paid 11.3 billion? What's not to like.
FTS and CU dividend aristocrats with over 40 consecutive years of dividend growth
Some of those increases by FTS IIRC where less than one cent just to keep the streak alive me thinks not pay for groceries.
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Re: Fortis (Symbol-FTS)

Post by Descartes »

They are having to swallow 4 billion in debt on top of that 6.9 billion premium price they are paying.
Is this an income company that, itself, is (over)reaching for yield?

disclosure: I *am* a stockholder ..although this is not a big holding for me.
"A dividend is a dictate of management. A capital gain is a whim of the market."
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Re: Fortis (Symbol-FTS)

Post by Shakespeare »

It's pretty well impossible to analyze the deal yourself.

Rather, you should ask: do you trust the management? Or not?

I trust them another 3.6K worth - but no more.
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Re: Fortis (Symbol-FTS)

Post by 2 yen »

BRIAN5000 wrote:
2 yen wrote:
jay wrote:FTS down 7.5% and ITC 1.5%?

First time I see both the buyer and seller down. What to make of this? Deal already priced in and FTS shareholders not happy?
FTS is paying a premium. Perhaps Mr. Market doesn't like the premium. Not quite sure how purchases like this can be done without paying a premium.

2 yen
Market cap of ITC is 6 bill and FTS paid 11.3 billion? What's not to like.

FTS and CU dividend aristocrats with over 40 consecutive years of dividend growth
Some of those increases by FTS IIRC where less than one cent just to keep the streak alive me thinks not pay for groceries.
Some big numbers, indeed. In looking at the market today, everything is down so the Fortis plunge is also caught up in that. Looking for the next market uptick to see how the Fortis deal actually washes out. It certainly is not pretty right now.

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Re: Fortis (Symbol-FTS)

Post by Dudsy »

Shakespeare wrote: Rather, you should ask: do you trust the management? Or not?
I don't know much about Fortis, but trust in management can go a long ways in markets like this.

I do know Emera and have posted previously how impressed I am with management. http://www.financialwisdomforum.org/for ... ra#p559231

Perhaps as a roadmap, Emera's share price dropped a fair amount when they announced the TECO acquisition back in September, but has recovered nicely.

Added: One reason the share price may have dropped as much today is investor concern over a new equity issue. Just a quick glance at the Fortis presentation p.29 shows "issue debt securities"... no mention of equity. Unless they use the convertible debt structure like Emera and Fortis have used in the past. http://business.financialpost.com/news/ ... cquisition
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Re: Fortis (Symbol-FTS)

Post by 2 yen »

A short, but clear analysis from Bloomberg:

http://www.bloomberg.com/gadfly/article ... o.headline

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Re: Fortis (Symbol-FTS)

Post by brad911 »

This is two in a row.....a steep premium IMO.
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Re: Fortis (Symbol-FTS)

Post by AltaRed »

I worry when utilities and pipelines go on spending sprees. Earnings take a bit hit and leverage gets way too high. Even for regulated utilities, public utility commissions rarely let the companies pass on 100% of increased borrowing costs, and there is at least one year of lag.
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Re: Fortis (Symbol-FTS)

Post by nomad »

http://business.financialpost.com/news/ ... -2-billion

Fortis buying Teck's stake in a BC dam and infrastructure. I have a middlin' position in Fortis, anyone have comments on this deal?
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Re: Fortis (Symbol-FTS)

Post by AltaRed »

It inherently makes sense. Why should Teck be distracted with electrical utility assets which are well outside its core business? The key is to have the right contracts in place to ensure the infrastructure is there for Teck's use.

I recall when I was in the oil production industry, we made several dispositions of non-core assets to focus on our core business. We got rid of pipelines, airplanes, etc. to those that could operate them more efficiently and effectively (higher capacity/utilization factors) in return for long term leases.
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Re: Fortis (Symbol-FTS)

Post by bpither »

I bought Fortis at 22.85 in 2009 ... it's core like Emera, TD Bank, CN Rail, BCE and Enbridge.

I kick back and enjoy the TAX EFFICIENT dividend growth :thumbsup:
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Re: Fortis (Symbol-FTS)

Post by Taggart »

Why I'm buying more of Fortis

Wednesday, May 31, 2017

The regulated utility operator has increased its dividend payment annually for 43 years

JOHN HEINZL
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