Assessing Utilities

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Shakespeare
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Re: Assessing Utilities

Post by Shakespeare »

I don't think China worries about NIMBYism....
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Re: Assessing Utilities

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JaydoubleU wrote: 11 Sep 2017 11:36 well, we're talking years and decades here. The main point is the decisions of governments to take steps, announce policies, lay out plans, with China becoming the latest and most significant.
Indeed, we are talking decades in selected western societies where trying to do 'national' projects is virtually impossible due to NIMBYism and lack of government 'backbone' to follow policy with action. Note lack of federal backbone to make pipelines go.....so far. The test will be Kinder Morgan.

I suspect it will be only when reliability of our electrical supply dives into brownouts and blackouts that something will have to give, i.e. forcing of transmission/distribution/substations over property rights, or having to throttle end usage of electricity (e.g. charging your EV at 2am?)
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Re: Assessing Utilities

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Site "C" dam in BC is now in jeopardy.
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Re: Assessing Utilities

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BRIAN5000 wrote: 11 Sep 2017 14:39 Site "C" dam in BC is now in jeopardy.
You know inside info from the BCUC?

Can't imagine how taxpayers would put up with footing billions in reclmation of the site after already spending billions in construction. BCers better not buy too many EVs lest the dams don't provide enough power 10 years from now to charge them. What a wonderful 'f*cked up' NDP/Green gov't we have chosen.
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Re: Assessing Utilities

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No inside info unless you call the daily "24" newspaper inside info, they have done a review and it comes out Sept 20 I think. Only 5.7 B to shut it down and they will remiate a bit and let it sit till 2024.
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Re: Assessing Utilities

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Whether or not climate change is due to human intervention, hurricanes Harvey and Irma are going to change a lot of minds in the US. And a lot gets done when environmentalists get together. For example, in Britain speed-bumps have been cursed by drivers for years yet local government continued to insist on them for "safety" reasons. When environmentalists became incensed that they caused extra pollution because of changes of speed the politicians quickly changed their minds and Britain is now in the process of removing them all.

Like transistors, batteries continue to get smaller, pack more power, and recharge faster. The battery I have in my latest weed-whacker is a third the size of the last one. I wouldn't underestimate the determination of engineers. When digital cameras first came out the quality was so poor that no-one thought they would ever be useful for photography. Electric cars will come faster than we think.

<rant> I agree with Altared that National projects just can't get done nowadays. It isn't so much NIMBYism, which has always been around, as the charter of rights and freedoms. Individual rights are so high on a pedestal that the needs of the many are constantly trumped by the rights of the few. It is changing the nature and the economy of the country. <end of rant>
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Re: Assessing Utilities

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We all know the tipping point argument:

Cars were a strange anomaly only for the wealthy until Ford released the first mass-produced Model T. My grandmother boiled water and washed clothes by hand, until at some time in the fifties, she got her first washing machine. When an electric car appears on the market for 10K or less, can be plugged into a 220 or even a 110 outlet and charged in an hour or two, people will start to buy them in droves. As Wallace says, battery technology is progressing rapidly. ISTM that it's just a matter of time.

Governments can definitely play a role by creating policies that favor the new cars: free parking for electric cars, free charging, lane priority, or conversely higher taxes on older petro models....or outright bans, as several governments are planning.

From an investment point of view, I reiterate that I want to have exposure to renewable energy utilities or at least to those that have a renewable plan.
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Re: Assessing Utilities

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JaydoubleU wrote: 12 Sep 2017 09:41 From an investment point of view, I reiterate that I want to have exposure to renewable energy utilities or at least to those that have a renewable plan.
So far, that is an investment* in AQN for me...... and whatever TRP and ENB are tinkering with. Whether CU, FTS or EMA warrant consideration in this area remains to be seen. I own CU but all of these 3 still have coal generating stations and IIRC, Fortis bought more as part of their last US purchase (may be mistaken). EMA seems hell bent on keeping their Nova Scotia coal generating assets well beyond JT's imposed 2030 deadline.

* Thought ALA was going to move more into hydro too until their yet-to-close WGL purchase.
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JaydoubleU
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Re: Assessing Utilities

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AQN is my largest holding. (Not so much by design, but because it rose so much from the levels of 2014, and I am not inclined to sell it) I also have some TRP, ENB, RNW, EMA, and the dreadful ALA. They all have renewable exposure / mandates. I'd add FTS if, as you say, it fell to an attractive level.
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Re: Assessing Utilities

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JaydoubleU wrote: 12 Sep 2017 19:05 AQN is my largest holding. (Not so much by design, but because it rose so much from the levels of 2014, and I am not inclined to sell it) I also have some TRP, ENB, RNW, EMA, and the dreadful ALA. They all have renewable exposure / mandates. I'd add FTS if, as you say, it fell to an attractive level.
Have you considered Bep.un as well?
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Re: Assessing Utilities

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FWIW, I have not because it is too diversified and too global for me to make any sense of it. And I don't like the LP structure. I'd rather a Canadian corporation with an eligible dividend for the DTC.
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Re: Assessing Utilities

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FWIW, I have not because it is too diversified and too global for me to make any sense of it. And I don't like the LP structure. I'd rather a Canadian corporation with an eligible dividend for the DTC.
Ditto. I have avoided the LP stocks. ENB is complicated enough...
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Re: Assessing Utilities

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JaydoubleU wrote: 13 Sep 2017 08:53
FWIW, I have not because it is too diversified and too global for me to make any sense of it. And I don't like the LP structure. I'd rather a Canadian corporation with an eligible dividend for the DTC.
Ditto. I have avoided the LP stocks. ENB is complicated enough...
I think geographic diversification is a key benefit for BEP. Companies that rely on hydroelectric generation need to be geographically diversified to smooth out the effects of weather anomalies.

The LP structure of BEP does not mean the distribution is not eligible for the DTC. The majority of BEP's distribution (approximately 75% in 2016) is eligible for the DTC.
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Re: Assessing Utilities

Post by gobsmack »

I can't find this information now but wasn't the payout ratio of BEP.UN's dividend above 100%? I looked into buying BEP.UN at some point but, if I remember correctly, I believe I was spooked by the large payout ratio.
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Re: Assessing Utilities

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gobsmack wrote: 13 Sep 2017 10:03 I can't find this information now but wasn't the payout ratio of BEP.UN's dividend above 100%? I looked into buying BEP.UN at some point but, if I remember correctly, I believe I was spooked by the large payout ratio.
BEP's payout ratio based on Earnings is well above 100%. However it's generally accepted that the POR for companies with large non-cash expenses (such as BEP) should be based on FFO rather than Earnings. I think BEP's objective is 70% POR based on FFO, but BEP is currently above that objective (probably close to 100% FFO POR for 2017). I think the distribution is safe, but I'm not expecting any increases in the distribution until the POR is lower.
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Re: Assessing Utilities

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There's been interest in utilities so I'm curious to see the discussion. I have no idea how to value these companies but if what some are saying is true (i.e. that P/E ratios are historically in single digits) then they may be overpriced. Below is a list of all the companies classified as utilities ranked by essentially Free cash flow to price.
i.e.
Operating cash flow - Interest expense - Dividends paid = "Free cash flow"/price

NB. Emera looks to be middle of the pack. If you compare it to FTS, the vast majority of it's cash flow is already spoken for in interest and dividends.
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Re: Assessing Utilities

Post by Peculiar_Investor »

Thanks. Always educational to see how others determine a valuation on a stock or a sector. The utilities sector has historically been the hardest for me because I don't find dividend yield, i.e. current dividend yield vs historical pattern, as a very useful metric. Because they are regulated businesses I think that P/E ratio provides some guidance on valuation, but less so than other non-regulated businesses.

In a potentially rising interest rate environment, debt load and debt servicing costs will probably become more important to review and consider.
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Re: Assessing Utilities

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BRIAN5000
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Re: Assessing Utilities

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rhenderson wrote: 14 Feb 2018 12:28 Anyone worried about this ?

https://www.investorvillage.com/uploads ... aEmera.pdf
More worried about this

Code: Select all

12 Feb 2018	 CA EMA	Credit Suisse	Outperform	Outperform	$52.00
12 Feb 2018	 CA EMA	BMO Capital	Outperform	Outperform	$51.00
more often these recommendations are late to the party or wrong, this one is in before a big run-up at least.
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Re: Assessing Utilities

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BRIAN5000 wrote: 14 Feb 2018 15:23
rhenderson wrote: 14 Feb 2018 12:28 Anyone worried about this ?

https://www.investorvillage.com/uploads ... aEmera.pdf
More worried about this

Code: Select all

12 Feb 2018	 CA EMA	Credit Suisse	Outperform	Outperform	$52.00
12 Feb 2018	 CA EMA	BMO Capital	Outperform	Outperform	$51.00
more often these recommendations are late to the party or wrong, this one is in before a big run-up at least.
Bank analysts and there reports are dubious . They are so busy doing lucrative work for the public corporations their analyst reporting becomes mushy. Very seldom do they ever issue a sell recommendation.
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Re: Assessing Utilities

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I have recently become aware of a pipeline (or perhaps an energy corridor) proposition in northern BC. It is referred to as the Eagle Spirit oil pipeline. But, the entire project does not appear to be limited to oil. It is a 16B$ project. It is also up against a proposed tanker ban. However, it appears to have the full backing of every landowner along the proposed trajectory.

Has anyone (Hint Altared...) heard about this? Who is backing it (I have done some Internet searching and can get nothing apart from Calvin Hevlin...)? Is it 100% a First Nation's project? What are its chances?
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Re: Assessing Utilities

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StuBee wrote: 22 Mar 2018 18:16 I have recently become aware of a pipeline (or perhaps an energy corridor) proposition in northern BC. It is referred to as the Eagle Spirit oil pipeline. But, the entire project does not appear to be limited to oil. It is a 16B$ project. It is also up against a proposed tanker ban. However, it appears to have the full backing of every landowner along the proposed trajectory.
Has anyone (Hint Altared...) heard about this? Who is backing it (I have done some Internet searching and can get nothing apart from Calvin Hevlin...)? Is it 100% a First Nation's project? What are its chances?
You've read this article in today's FP?
An unjustified infringement': First Nation sues Ottawa, British Columbia over oil tanker ban
http://business.financialpost.com/commo ... tanker-ban
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Re: Assessing Utilities

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It's been around for a little while. Don't think anyone is taking it seriously, at least not yet. It's hugely expensive, likely is not economically feasible on its own merit, does not have any technical nor financial deep pockets behind it (yet), and will face major NGO and 'fair weather' fanatical opposition as well....though not nearly convenient to protest on-site like it is on the streets of Burnaby (a long ways to walk without using aviation or marine fuel). Nor do I think Alaska has shown any support at their far southern end of domestic territory, and tanker traffic would essentially be right on the International border (and may not be able to navigate 100% on the US side). Not in my lifetime I think.
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Re: Assessing Utilities

Post by Sensei »

Hi,

After a fairly crappy day for the markets, I noticed that utilities were mainly up. (EMA, FTS for example). Many REITs were also up. Almost everything else went down. Hmmm. I wonder why?
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Re: Assessing Utilities

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AltaRed wrote: 22 Mar 2018 18:58 It's been around for a little while. Don't think anyone is taking it seriously, at least not yet. It's hugely expensive, likely is not economically feasible on its own merit, does not have any technical nor financial deep pockets behind it (yet), and will face major NGO and 'fair weather' fanatical opposition as well....though not nearly convenient to protest on-site like it is on the streets of Burnaby (a long ways to walk without using aviation or marine fuel). Nor do I think Alaska has shown any support at their far southern end of domestic territory, and tanker traffic would essentially be right on the International border (and may not be able to navigate 100% on the US side). Not in my lifetime I think.
OK. Thanks for the info. It is looking quite bleak when it comes to any pipeline development. We can only hope that ENB's line 3 replacement and/or keystone XL are completed. (I am not very hopeful about transmountain)
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