Q: Hello,
Hydro One seems to be going up quite a bit. Do you think the valuation is much higher than fortis and Emera? If so, i was thinking of selling Hydro One and moving the monies to fortis or Emera. Any comments; thanks very much
Hydro One seems to be going up quite a bit. Do you think the valuation is much higher than fortis and Emera? If so, i was thinking of selling Hydro One and moving the monies to fortis or Emera. Any comments; thanks very much
5i Research Answer:
H hit a new high today. On a price/earnings basis, it is 24X. EMA is 18X, FTS is 19X. We are typically very reluctant to sell into strength, unless position size becomes too great. But, considering utilities are typically low-growth, in this case we could see a move to FTS (preferred). But we would not see it as completely necessary, and would not consider it if taxes were payable on H.