Energy Distributors: A Fortis Inc. (TSE:FTS) Comparison - Part 3
The second entry in my comparison of energy distributors is Fortis.
Fortis operates mostly in Canada with some operations in the Caribbean and the US. Through Terasen they serve 96% of the population in BC for natural gas. It’s somewhat of a monopoly in BC with respect to natural gas and not surprising considering it was formally BC Gas. They also own hotels through Fortis Properties in the atlantic provinces.
Earnings History
Fortis’ earnings have been growing albeit slowly. I suppose it’s to be expected considering energy distribution is regulated.
- 2010 earnings per share $1.55 (based on today’s price).
- 2009 earnings per share $1.54.
- 2008 earnings per share $1.56.
- 2007 earnings per share $1.40.
- 2006 earnings per share $1.42.
- 2005 earnings per share $1.35.
- 2004 earnings per share $1.07.
Dividend History
Here is the type of graph we like to see when we look at dividends. Fortis must be proud of it since they maintain the graph with all the details on their website. I say this because I usually have to put the graphs together.
Terasen Gas (Formally BC Gas) was acquired in 2007 adding over 900,000 customers.
Stock Price Comparison
Here is a comparison of Fortis with Just Energy and Enbridge. I keep Enbridge as a comparison because it is the biggest player.
Thoughts
Fortis has a market capitalization of 4.8B$. Their payout ratio is currently at 67.5% up from 58.6% in 2007. Their dividend growth has come mostly from an increase in payout considering their EPS has been relatively flat. Their business is pretty predictable though and I would estimate that over 75% of their business is regulated.
Is Fortis a company you invest in?
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Not yet, but I will (FTS). I'm trying to increase my holdings in ENB first, to DRIP more shares. I figure when I have close to 200 ENB shares, it will be time to increase my diversification (into FTS), and simply let my ENB DRIP away….
How about you Passive?
I am getting setup with it over the coming month to DRiP. I'll have 1 share and ready to DRiP. After that, it's a matter of deciding where my little money goes from there.
I bought FTS a while back, but I only have 100 so far. I plan get get FTS when it dips down a bit. I love dividends!
PS thanks for commenting on my page- sorry the comments seem to be allocating to the wrong post and am trying to fix it. =)
@Financial Cents
I am getting setup with it over the coming month to DRiP. I'll have 1 share and ready to DRiP. After that, it's a matter of deciding where my little money goes from there.
@YoungAndThrifty
You are probably right on edge of being able to drip 1 share. Are you reinvesting the dividends?
I eagerly bought Fortis earlier this year when it was yielding 4% because it was such a great company that I wanted to add it to my portfolio asap. If I would have waited, I could have picked it up with a yield of 4.3% but my crystal ball is broken.
I have 400 shares and could easily DRIP, but my strategy is to pool dividends and wait for a good opportunity to purchase more stock on my watchlist.
Picked up Fortis during the "flash crash" this year. It has been on my wishlist for a while. Just like A2D I pool my income to make opportunistic buys.
FTS has been doing great lately! (At 52 week high). No, I haven't dripped it yet, but plan on buying more when it dips down (manually drip?).
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