Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (CAD) | Target 1 (CAD) | Target 2 (CAD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 28 Apr, 25 | CU | Buy | CAD 37.74 | CAD 39.74 | CAD 41.2 | 91 days | Closed |
3.34%
|
*Return(%) represent the percentage change between the entry price and exit price of the recommendation.
Data Powered by EOD Historical Data (“EODHD”).
Canadian Utilities Limited, together with its subsidiaries, engages in the electricity, natural gas, renewables, pipelines, and liquids businesses in Canada, Australia, and internationally. It operates through ATCO Energy Systems, ATCO EnPower, and ATCO Australia. The ATCO Energy Systems segment provides regulated electricity transmission and distribution services in northern and central east Alberta, the Yukon, the Northwest Territories, and in the Lloydminster area of Saskatchewan; and international electricity services. This segment also offers integrated natural gas transmission and distribution services throughout Alberta and in the Lloydminster area of Saskatchewan. The ATCO EnPower segment provides electricity generation, natural gas storage, industrial water solutions, and related infrastructure development throughout Alberta, the Northwest Territories, Ontario, Mexico, and Chile. The ATCO Australia segment offers regulated natural gas distribution services in Western Australia and electricity generation services. The company was incorporated in 1927 and is headquartered in Calgary, Canada. Canadian Utilities Limited is a subsidiary of ATCO Ltd.
Higher Net Margin: 13.1% in FY 2024 vs 12.8% of Industry Median
Higher EBITDA Margin: 49.3% in FY 2024 vs 39.8% of Industry Median
Higher Debt to Equity Ratio: 2.08x in FY 2024 vs 1.38x of Industry Median
Lower ROE: 6.9% in FY 2024 vs 9.2% of Industry Median
Volatility in energy commodity price, Shortages of skilled Labour, Inflation, Trade tariffs, supply chain issues, etc
| Entry Price | Support* | Target 1** | Target 2** |
|---|---|---|---|
| 37.74 | 34.43 | 39.74 | 41.2 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
**Target prices may vary by ±0.5% depending on market volatility.
Diversified Global Energy Company: On a global scale, the company energizes homes, businesses, industries, and delivers customer-focused energy infrastructure solutions. The company has a diversified global portfolio of investments that delivers operational excellence.
Higher Cash Flows from Operating Activities: The company's cash flows from operating activities were CAD 1,917 million in 2024, CAD 137 million higher than the same period in 2023 mainly due to growth in rate base, a higher return on rate base, and the timing of certain revenues and expenses in ATCO Energy Systems. These numbers were partially offset by restructuring costs incurred in 2024, and lower customer contributions.
Healthy Dividend Yield: Canadian Utilities Ltd. has increased its dividend per share for 53 consecutive years, the longest track record of annual dividend increased of any publicly traded Canadian company and recently it declared a first quarter dividend of CAD 45.77 cents per share. Moreover, at the last closing price of CAD 37.74 as on April 25, 2025, the stock offered a healthy dividend yield of ~4.85%, which looks decent considering the current macro economic dyanamics.
Considering the expected valuation upside, transmission and distribution underpin growth in Alberta, diversified global energy operations, decent dividend yield, current trading levels and key business risks, a ‘Buy’ recommendation has been given on the stock at the last closing price of CAD 37.74, as on April 25, 2025.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Utilities Industry: Utilities - Diversified
| Company | Change (CAD) | Price (CAD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| CU Canadian Utilities Limited |
0.26 0.67% | 39.27 | 25.90 | 15.77 | 2.08 | 1.89 | 6.05 | 12.30 |
| AQN Algonquin Power & Utilities Corp |
0.06 0.73% | 8.24 | 20.71 | 19.27 | 2.56 | 0.98 | 4.59 | 9.35 |
Data Powered by EOD Historical Data (“EODHD”).
Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is April 25, 2025. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Disclaimer :
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