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Canadian Utilities Limited Class A Non-Voting Shares (CU $42.13)
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ATCO Ltd. Class I Non-voting Shares (ACO.X $55.09)
Q: I own Canadian Utilities and Atco Class 1 shares and they have appreciated nicely over time. How would you rate their prospects for growth in share price for the next 5 years?
With today's economic climate with the US, and the Canadian government's stated intention to push for big Canadian infrastructure projects, would one of these companies be a stronger bet?
Do you see the current dividend level as being safe for both companies going forward?
And, is there a good reason to own both of these stocks, given that CU is a sub of Atco?
Thank you for you insight and have a great day!
With today's economic climate with the US, and the Canadian government's stated intention to push for big Canadian infrastructure projects, would one of these companies be a stronger bet?
Do you see the current dividend level as being safe for both companies going forward?
And, is there a good reason to own both of these stocks, given that CU is a sub of Atco?
Thank you for you insight and have a great day!
5i Research Answer:
ACO.X owns 38% of CU, so there is some overlap if both are owned and we would not see both as totally necessary. As utilities, they could benefit from government programs designed to boost energy output, especially as energy needs of AI expand. ACO.X, due to its industrial work housing unit, might be better positioned for infrastructure growth. While no dividend is guaranteed we would have no concern on either. Based on consensus estimates (which can change), neither is really expected to see much more than 5% earnings growth annually over the next couple of years.