Investment Q&A

FTS is trading right around its mean three-year forward price/earnings ratio of 18.9x, currently at 18.7x. The highest and lowest points for this multiple over the timeframe were 23.1x and 16.1x. Relative to peers such as H, EMA, and CPX, valuations range from 24.9x at the highest and 11.6x at the lowest. We will note that utility names tend to trade near/above their price targets. Being such highly cash generative businesses which are also typically quite mature, they often trade at or above price targets. Utilities have become more expensive over recent quarters on their positive outlook with lower rates and being a trendy investment to benefit off increased data center demand. This has caused valuations to become more expensive while fundamentals have not immediately changed. For FTS specifically, we are comfortable at current levels.