Q: According to my TD direct Investment site, analysts are advising selling Fortis. This seems excessive to me. What do you think? I'm a not aggressive senior without, given my age, a particularly long recovery time.
5i Research Answer:
FTS has 16 analysts: five BUY, six HOLD, five SELL. We think it is fine, but no stock is risk-free. At 16X earnings it is priced OK. It has a very solid multi-decade record of increasing dividends annually. 12-month payout ratio on operating cash flow is low at 21%. It raised its dividend in September. Lower rates should help both the company's fundamentals (lower expenses) and sentiment towards the stock. It is not perfect, but at $26B market cap with a 4.4% dividend yield we would consider it quite fine for conservative income.