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Fortis Inc. (FTS)
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Hydro One Limited (H)
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Brookfield Renewable Corporation Class A Exchangeable Subordinate Voting Shares (BEPC)
Q: Of these three utilities, BEPC’s share price has suffered significantly more than the other two over the past year. Is there a specific reason why?
5i Research Answer:
BEPC is a 'paired' company with BEP.UN and gets the dividend tax credit. Thus, it trades at a premium to BEP.UN and this premium can and does vary quite a lot. But that does not explain all the difference. BEP.UN has missed seven of the past eight quarters, which does not help sentiment. With a higher distribution than the others, it has less capital left for growth. Because of BEP.UN's limited partnership structure, it often reports an accounting loss, which can confuse investors when comparing companies. The Brookfield Group of companies also tends to go in and out of favour at various times. But certainly fundamentals and execution at the others have been better in the past while.