Q: ACO.X: lots of debt., very low ROE and seems fully valued - Morning Star. I don't see much to make this a buy for the long-tern. What say you? At all time high maybe because considered a HALO stocK?
5i Research Answer:
Its HALO qualities (not threatened by AI) and defensive characteristics are attractive to investors in an uncertain market environment. Valuation (13x) and dividend (3.08%, with some growth) also remain attractions. Debt is high, but that is very common with utilities. The stock is up 47% in a year, and we would not expect those type of gains on a regular basis, in a slow-growth industry. But lower interest rates could still keep investors interested. We would be OK still holding this.