Latest news with #CanadianUtilities
Yahoo
29-05-2025
- Business
- Yahoo
Should You Be Worried About Canadian Utilities Limited's (TSE:CU) 6.7% Return On Equity?
Many investors are still learning about the various metrics that can be useful when analysing a stock. This article is for those who would like to learn about Return On Equity (ROE). To keep the lesson grounded in practicality, we'll use ROE to better understand Canadian Utilities Limited (TSE:CU). Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors' money. In other words, it is a profitability ratio which measures the rate of return on the capital provided by the company's shareholders. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. Return on equity can be calculated by using the formula: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Canadian Utilities is: 6.7% = CA$485m ÷ CA$7.2b (Based on the trailing twelve months to March 2025). The 'return' is the profit over the last twelve months. Another way to think of that is that for every CA$1 worth of equity, the company was able to earn CA$0.07 in profit. Check out our latest analysis for Canadian Utilities By comparing a company's ROE with its industry average, we can get a quick measure of how good it is. Importantly, this is far from a perfect measure, because companies differ significantly within the same industry classification. If you look at the image below, you can see Canadian Utilities has a lower ROE than the average (8.5%) in the Integrated Utilities industry classification. Unfortunately, that's sub-optimal. Although, we think that a lower ROE could still mean that a company has the opportunity to better its returns with the use of leverage, provided its existing debt levels are low. When a company has low ROE but high debt levels, we would be cautious as the risk involved is too high. You can see the 3 risks we have identified for Canadian Utilities by visiting our risks dashboard for free on our platform here. Companies usually need to invest money to grow their profits. The cash for investment can come from prior year profits (retained earnings), issuing new shares, or borrowing. In the first two cases, the ROE will capture this use of capital to grow. In the latter case, the use of debt will improve the returns, but will not change the equity. Thus the use of debt can improve ROE, albeit along with extra risk in the case of stormy weather, metaphorically speaking. Canadian Utilities clearly uses a high amount of debt to boost returns, as it has a debt to equity ratio of 1.56. With a fairly low ROE, and significant use of debt, it's hard to get excited about this business at the moment. Investors should think carefully about how a company might perform if it was unable to borrow so easily, because credit markets do change over time. Return on equity is useful for comparing the quality of different businesses. Companies that can achieve high returns on equity without too much debt are generally of good quality. If two companies have the same ROE, then I would generally prefer the one with less debt. Having said that, while ROE is a useful indicator of business quality, you'll have to look at a whole range of factors to determine the right price to buy a stock. It is important to consider other factors, such as future profit growth -- and how much investment is required going forward. So I think it may be worth checking this free report on analyst forecasts for the company. Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Yahoo
29-05-2025
- Business
- Yahoo
Should You Be Worried About Canadian Utilities Limited's (TSE:CU) 6.7% Return On Equity?
Many investors are still learning about the various metrics that can be useful when analysing a stock. This article is for those who would like to learn about Return On Equity (ROE). To keep the lesson grounded in practicality, we'll use ROE to better understand Canadian Utilities Limited (TSE:CU). Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors' money. In other words, it is a profitability ratio which measures the rate of return on the capital provided by the company's shareholders. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. Return on equity can be calculated by using the formula: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Canadian Utilities is: 6.7% = CA$485m ÷ CA$7.2b (Based on the trailing twelve months to March 2025). The 'return' is the profit over the last twelve months. Another way to think of that is that for every CA$1 worth of equity, the company was able to earn CA$0.07 in profit. Check out our latest analysis for Canadian Utilities By comparing a company's ROE with its industry average, we can get a quick measure of how good it is. Importantly, this is far from a perfect measure, because companies differ significantly within the same industry classification. If you look at the image below, you can see Canadian Utilities has a lower ROE than the average (8.5%) in the Integrated Utilities industry classification. Unfortunately, that's sub-optimal. Although, we think that a lower ROE could still mean that a company has the opportunity to better its returns with the use of leverage, provided its existing debt levels are low. When a company has low ROE but high debt levels, we would be cautious as the risk involved is too high. You can see the 3 risks we have identified for Canadian Utilities by visiting our risks dashboard for free on our platform here. Companies usually need to invest money to grow their profits. The cash for investment can come from prior year profits (retained earnings), issuing new shares, or borrowing. In the first two cases, the ROE will capture this use of capital to grow. In the latter case, the use of debt will improve the returns, but will not change the equity. Thus the use of debt can improve ROE, albeit along with extra risk in the case of stormy weather, metaphorically speaking. Canadian Utilities clearly uses a high amount of debt to boost returns, as it has a debt to equity ratio of 1.56. With a fairly low ROE, and significant use of debt, it's hard to get excited about this business at the moment. Investors should think carefully about how a company might perform if it was unable to borrow so easily, because credit markets do change over time. Return on equity is useful for comparing the quality of different businesses. Companies that can achieve high returns on equity without too much debt are generally of good quality. If two companies have the same ROE, then I would generally prefer the one with less debt. Having said that, while ROE is a useful indicator of business quality, you'll have to look at a whole range of factors to determine the right price to buy a stock. It is important to consider other factors, such as future profit growth -- and how much investment is required going forward. So I think it may be worth checking this free report on analyst forecasts for the company. Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
26-05-2025
- Business
- Yahoo
ATCO's Efficiency Initiatives to Save Alberta Utility Customers More Than Half a Billion Dollars
CALGARY, AB, May 26, 2025 /CNW/ - ATCO Ltd. (TSX: ACO.X) (TSX: ACO.Y)/Canadian Utilities Limited (TSX: CU) Among the updates ATCO provided to share owners at its recent Annual General Meeting was that its ATCO Gas and ATCO Electric businesses are on track to deliver more than $500 million in savings in distribution rates to its Alberta customers during the current regulatory rate period of 2023-2028. Distribution rates are the costs of operating the pipes and wires that provide natural gas and electricity to homes and businesses and represent the portion of the utility bill that ATCO Gas and ATCO Electric are responsible for. This achievement reflects an eight per cent reduction in natural gas and electricity utility distribution rates, made possible through ATCO's focused efficiency measures and cost-saving initiatives since 2018. Of note, ATCO is the only Alberta utility delivering natural gas and electricity distribution rate reductions to customers over the 2023-2028 period. "At ATCO, we understand the pressures Albertans face with rising costs across essential services," said Jason Sharpe, Chief Operating Officer of ATCO Energy Systems. "We're very proud of how our team members — who are also utility customers themselves — have worked diligently to deliver meaningful savings while maintaining the reliability and safety our customers expect." ATCO remains steadfast in its mission to serve Albertans with integrity, transparency, and a long-term vision for reliable and affordable energy. "These savings are not just numbers, they represent ATCO's deep-rooted commitment to our customers and communities," noted Mr. Sharpe. The ATCO group of companies continues to advocate for a regulatory and business environment that supports innovation, efficiency and affordability—ensuring Alberta remains one of the most attractive places to live and work. About ATCO As a global enterprise, ATCO Ltd. and its subsidiary and affiliate companies have approximately 21,000 employees and assets of $27 billion. ATCO is committed to future prosperity by working to meet the world's essential energy, housing, security and transportation challenges. ATCO Structures designs, builds and delivers products to service the essential need for housing and shelter around the globe. ATCO Frontec provides operational support services to government, defence and commercial clients. ATCO Energy Systems delivers essential energy for an evolving world through its electricity and natural gas transmission and distribution, and international electricity operations. ATCO EnPower creates sustainable energy solutions in the areas of electricity generation, energy storage, industrial water and cleaner fuels. ATCO Australia develops, builds, owns and operates energy and infrastructure assets. ATCO Energy and Home Services provides retail electricity and natural gas services, home maintenance services and professional home advice that bring exceptional comfort, peace of mind and freedom to homeowners and customers. ATCO also has investments in ports and transportation logistics, the processing and marketing of ash, retail food services and commercial real estate. More information can be found at Investor Inquiries: Colin Jackson Senior Vice President, Financial Operations 403-808-2636 Media Inquiries: Kurt Kadatz Director, Corporate Communications Media@ 587-228-4571 Forward Looking Information Advisory Certain statements contained in this news release constitute forward-looking information, including, but not limited to, references to reductions in natural gas and electricity distribution rates to be delivered to customers during the regulatory rate period from 2023-2028. Although we believe that the expectations reflected in the forward-looking information are reasonable based on the information available on the date such statements are made and processes used to prepare the information, such statements are not guarantees of future performance and no assurance can be given that these expectations will prove to be correct. Forward-looking information should not be unduly relied upon. By their nature, these statements involve a variety of assumptions, known and unknown risks and uncertainties, and other factors, which may cause actual results, levels of activity, and achievements to differ materially from those anticipated in such forward-looking information. The forward-looking information reflects beliefs and assumptions with respect to, among other things, the applicability and stability of legal and regulatory requirements; continuing collaboration with certain business partners, and regulatory and environmental groups; the performance of assets and equipment; the ability to meet current project schedules, and other assumptions inherent in management's expectations in respect of the forward-looking information identified herein. Actual results could differ materially from those anticipated in this forward-looking information as a result of, among other things, risks inherent in the performance of assets; applicable laws and regulations and the interpretation and manner of enforcement of such laws and regulations; changes to government policies; regulatory decisions; competitive factors; evolving market or economic conditions; credit risk; interest rate fluctuations; the availability and cost of labour, materials, services, and infrastructure; future demand for resources; the development and execution of projects; prices of electricity and natural gas; the risk of operational disruptions, outages, or force majeure events; the occurrence of unexpected events such as fires, extreme weather conditions, explosions, blow-outs, equipment failures, transportation incidents, and other accidents or similar events; global pandemics; the imposition of or changes to customs duties, tariffs or other trade restrictions; geopolitical tensions and wars; and other risk factors, many of which are beyond the control of the Company. Due to the interdependencies and correlation of these factors, the impact of any one material assumption or risk on a forward-looking statement cannot be determined with certainty. Readers are cautioned that the foregoing lists are not exhaustive. For additional information about the principal risks that are faced by the companies, see "Business Risks and Risk Management" in Management's Discussion and Analysis for ATCO Ltd. and Canadian Utilities Limited for the year ended December 31, 2024. Any forward-looking information contained in this news release represents management's expectations as of the date hereof, and is subject to change after such date. The companies disclaim any intention or obligation to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required by applicable securities legislation. SOURCE ATCO Ltd. View original content:
Globe and Mail
14-05-2025
- Business
- Globe and Mail
Ottawa needs policy certainty to help attract energy investment and strengthen economy, Canadian Utilities CEO says
The new federal government must ensure policy certainty in the energy and power sectors to encourage global investment and build a more resilient economy, the new chief executive of Canadian Utilities Ltd. says. Bob Myles, who took the reins of the company on May 8, told The Globe and Mail Wednesday that the pro-infrastructure messaging coming from Ottawa is encouraging, particularly after six months of tremendous uncertainty over the future of Canada's industrial carbon tax. But uncertainty on the global economic front – including tariffs imposed by the United States – is exactly where Mr. Myles sees opportunities for the utilities arm of Calgary-based energy and structures giant ATCO Ltd. ACO-X-T 'Going to our neighbours to the south, it's actually been helpful in a weird way,' because Canada is realizing it must do things on its own and avoid relying on the U.S., he said. Take the problem of shipping ammonia by rail from Alberta to the West Coast, which is key to developing Canada's burgeoning hydrogen sector. A year ago, neither British Columbia nor Ottawa wanted to touch the issue, Mr. Myles said, because ammonia is derived from natural gas, so the subject wound up in the touchy fossil-fuels file. 'That wasn't supporting where the former prime minister wanted to go, so it was really difficult to get anything done. Things were happening, but no one would make a final decision,' he said. But the chaos south of the border has changed all that, and has lit a fire under Canada to work together more effectively, he said. 'You can't even transport materials from Saskatchewan into Alberta right now. So if we can address all of that, Canada can become a lot stronger.' ATCO CEO Nancy Southern told the company's annual meeting in Calgary Wednesday that she expects current trade tensions, supply chain challenges, inflationary pressures and geopolitical conflict to continue over the coming years, or perhaps even intensify. 'In these times, it seems that the only thing we can be sure of is that nothing stays the same,' she said. But she takes heart in the fact that new Prime Minister Mark Carney has committed to 'bold and decisive action in order to build a stronger Canada,' including doubling national housing output, establishing the country as a global energy superpower and forging new trade corridors. 'While political will has long been the stumbling block, the benefits of these corridors have never been clearer, and the support has never been greater,' Ms. Southern said. 'These aren't merely aspirations. They are imperatives of the highest order, and now is the time for unity, resolve and unwavering execution, because the future of our nation demands nothing less.' Ms. Southern added that key to the energy superpower question is Canada's exploitation of its natural gas resources, both as an export and for domestic use – particularly because it's so cheap. On the energy transition side, Mr. Myles identified opportunities for ATCO and Canadian Utilities in gas storage, hydrogen, ammonia and carbon capture and sequestration. The companies are already active in all of those spaces, but Mr. Myles said there needs to be certainty from the federal government to boost global market investments in Canada. He pointed to Japan and South Korea as examples. Both want to invest in Canada, but don't know whether it's a competitive place to invest, or whether they should look to the Gulf Coast or the Middle East instead, he said. 'If we can move quickly as a country, I think we've got a great opportunity.' In Alberta specifically, Mr. Myles sees room for growth because of increasing resource development and population growth. But uncertainty remains in the province's utilities space, including with the restructuring of Alberta's power market. There's also the looming question of the industrial carbon tax. Premier Danielle Smith this week announced an indefinite freeze on Alberta's industrial carbon price, effective immediately at $95 per tonne of emissions. Mr. Myles said the good news is that the price on carbon didn't disappear altogether. 'If you take that away – something that's been in place since 2007 – what does that tell the investors outside of Alberta? It's saying as soon as you have something in place, it could disappear tomorrow,' he said. But he doesn't believe the story has ended for the question of the price itself. 'At $95, is it sufficiently high to actually justify some of the projects? It's debatable. It may need to be higher than that to do that,' he said.
Yahoo
14-05-2025
- Business
- Yahoo
Is This Correction Your Chance? Buy Up These 4 Dividend Stocks on Sale
Written by Amy Legate-Wolfe at The Motley Fool Canada Market corrections tend to make investors nervous, but for those with a long-term mindset, they can actually be a gift. Prices drop. Fear rises. But for steady dividend stocks, the value doesn't just vanish. Instead, it might be hiding under a temporarily lower share price. Right now, several well-established Canadian dividend stocks are off their highs and trading at more attractive valuations. For investors hunting for yield, quality, and growth, this could be a perfect time to pounce. Let's start with Fortis (TSX: FTS). Fortis is a name synonymous with stability. It provides regulated gas and electric utilities to customers across North America, and that steady business keeps the cash flowing even during rocky economic times. In the first quarter of 2025, Fortis reported net earnings of $499 million, or $1.00 per share. That's up from $459 million, or $0.93 per share, in the same quarter last year. Fortis also reaffirmed its five-year capital plan worth $26 billion. The aim is to grow its rate base from $39 billion in 2024 to $53 billion by 2029, a compound annual growth rate of 6.5%. Investors can take comfort knowing this capital plan is tied to regulated, long-duration assets. Plus, Fortis recently reconfirmed its guidance for 4% to 6% annual dividend growth through 2029. The current dividend yield is around 3.6%, and with the stock trading around $67, this is a proven dividend grower that's now on sale. Then there's Canadian Utilities (TSX: CU), which may not be exciting, but that's kind of the point. When volatility rises, boring is beautiful. Canadian Utilities provides essential services like electricity and natural gas transmission, and its customer base spans Alberta, Australia, and other parts of the world. In the first quarter of 2025, revenue held steady at $1.1 billion. Earnings came in at $206 million, or $0.75 per share, up slightly from last year. What stands out most is the dividend track record. Canadian Utilities has raised its dividend every year for 52 years. That's the longest streak of annual increases among any publicly traded Canadian company. The current yield is around 4.9%, and with the stock trading around $37, this is a reliable income generator for any long-term portfolio. Next is iA Financial Corporation (TSX: IAG). iA Financial flies under the radar compared to bigger insurers, but it has been quietly building momentum. In the first quarter of 2025, iA posted core diluted earnings per share (EPS) of $2.91, up 19% year over year. That's no small feat in a choppy market. What's more, the insurer has been seeing strong inflows into its wealth management segment, while continuing to expand its individual insurance operations. The dividend stock also raised its dividend by 6.7% earlier this year, showing its commitment to returning capital to shareholders. At around $133 per share, the stock is down from a 52-week high above $141, giving long-term investors a better entry point to a well-managed, growing dividend player with a yield at 2.7%. Finally, there's Manulife Financial (TSX: MFC), one of Canada's largest insurance and financial services firms. Manulife had a slightly mixed first quarter in 2025, with core earnings of $1.8 billion, down 1% from a year ago. Still, it saw strength in its Canadian business, with earnings rising 3% to $374 million. The dividend stock also has significant exposure to Asia, which offers long-term growth potential. Manulife's dividend yield is very attractive right now at 4.1%, and the payout ratio remains reasonable. With the dividend stock hovering around $43, investors are getting a globally diversified insurer at a discount. Manulife's share buyback activity and improving profitability in its Canadian and U.S. segments suggest a strong foundation for future returns. These four dividend stocks each offer something a little different, but all share one thing in common: they are built to last. When markets correct, the instinct is to flee. But long-term investors know that's when the best opportunities arise. Buying these dependable dividend payers now could mean locking in higher yields and enjoying steady growth for decades to come. Just as importantly, it means letting fear create opportunity, and that's something the market always rewards. The post Is This Correction Your Chance? Buy Up These 4 Dividend Stocks on Sale appeared first on The Motley Fool Canada. Motley Fool Canada's market-beating team has just released a brand-new FREE report revealing 5 "dirt cheap" stocks that you can buy today for under $50 a share. Our team thinks these 5 stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune. Don't miss out! Simply click the link below to grab your free copy and discover all 5 of these stocks now. Claim your FREE 5-stock report now! More reading Made in Canada: 5 Homegrown Stocks Ready for the 'Buy Local' Revolution [PREMIUM PICKS] Market Volatility Toolkit Best Canadian Stocks to Buy in 2025 Beginner Investors: 4 Top Canadian Stocks to Buy for 2025 5 Years From Now, You'll Probably Wish You Grabbed These Stocks Subscribe to Motley Fool Canada on YouTube Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Fortis. The Motley Fool has a disclosure policy. 2025 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
