October 17, 2024
Top 10 Stock Canadian Utilities Strong Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Canadian Utilities – Top 10 Stock in Toronto Stock Exchange Index TSX Composite
Canadian Utilities is listed as a top 10 stock on October 17, 2024 in the market index TSX Composite because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is negative and growth performance is below market average, both a sign for caution. Based on the Obermatt 360° View of 83 (top 83% performer), Obermatt assesses an overall strong buy recommendation for Canadian Utilities on October 17, 2024.
Snapshot: Obermatt Ranks
| Country | Canada |
| Industry | Multi-Utilities |
| Index | TSX Composite |
| Size class | Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Canadian Utilities Strong Buy
| 360 METRICS | October 17, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 93 |
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| GROWTH | ||||||||
| GROWTH | 47 |
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| SAFETY | ||||||||
| SAFETY | 85 |
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| SENTIMENT | ||||||||
| SENTIMENT | 28 |
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| 360° VIEW | ||||||||
| 360° VIEW | 83 |
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ANALYSIS: With an Obermatt 360° View of 83 (better than 83% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Canadian Utilities are very positive. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Canadian Utilities. The consolidated Value Rank has an attractive rank of 93, which means that the share price of Canadian Utilities is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 93% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 85. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 28. Professional investors are more confident in 72% other stocks. The consolidated Growth Rank also has a low rank of 47, which means that the company is below average in terms of growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. 53 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 83, Canadian Utilities is better positioned than 83% of all alternative stock investment opportunities based on the Obermatt Method. The picture is mixed here. The stock seems to be a good value (Value Rank of 93), and the financing structure is on the safer side (Safety Rank of 85). However, sentiment in the professional investor community is below-average (Sentiment Rank of 28), as is the growth momentum for the company (Growth Rank of 47). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. Even though the financing structure is not as important as Value, Growth, and Sentiment, investors should still be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for Canadian Utilities only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 28 (better than 28% compared with alternatives), overall professional sentiment and engagement for the stock Canadian Utilities is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Canadian Utilities. Analyst Opinions are at a rank of 8 (worse than 92% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 50, which means that stock research experts are more positive in their investment recommendations in the company. In other words, they are getting more optimistic of stock investments in Canadian Utilities. More encouragingly, the Professional Investors rank is 79, which means that professional investors hold more stock in this company than in 79% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 34, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 66% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 28 (less encouraging than 72% compared with investment alternatives), Canadian Utilities has a reputation among professional investors that is below that of its competitors. The sentiment signals are mixed for Canadian Utilities. While analysts and the news channels are negative, there is a change in what analysts think. Above-average institutional investors in this company support them. Sentiment signals remain mixed with analysts and news channels pessimistic, though improving, and professional investors above average. ...read more
Value Strategy: Canadian Utilities Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 93 (better than 93% compared with alternatives) for 2024, Canadian Utilities shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Canadian Utilities. Price-to-Sales is 80 which means that the stock price compared with what market professionals expect for future sales is lower than for 80% of comparable companies, indicating a good value for Canadian Utilities's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 87% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 80. Compared with other companies in the same industry, dividend yields of Canadian Utilities are expected to be higher than for 91% of all competitors (a Dividend Yield rank of 91). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 93, is a buy recommendation based on Canadian Utilities's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Canadian Utilities based on its detailed value metrics.
Growth Strategy: Canadian Utilities Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 47 (better than 47% compared with alternatives), Canadian Utilities shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Canadian Utilities. Capital Growth has a rank of 84, which means that currently professionals expect the company to grow its invested capital more than 49% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 59 (above 59% of alternative investments). But Sales Growth has only a rank of 14, which means that, currently, professionals expect the company to grow less than 86% of its competitors, and Profit Growth is also low at a rank of 49. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 47, is a hold recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Canadian Utilities, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: Canadian Utilities Debt Financing Safety very solid
| SAFETY METRICS | October 17, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 44 |
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| REFINANCING | ||||||||
| REFINANCING | 99 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 57 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 85 |
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ANALYSIS: With an Obermatt Safety Rank of 85 (better than 85% compared with alternatives) for 2024, the company Canadian Utilities has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Canadian Utilities is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Canadian Utilities. Refinancing is at 99, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 99% of its competitors. Liquidity is also good at 57, meaning the company generates more profit to service its debt than 57% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 44, which means the company has an above-average debt-to-equity ratio. It has more debt than 56% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 85 (better than 85% compared with alternatives), Canadian Utilities has a financing structure that is significantly safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Canadian Utilities could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more
Combined financial peformance: Canadian Utilities Top Financial Performance
| COMBINED PERFORMANCE | October 17, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 93 |
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| GROWTH | ||||||||
| GROWTH | 47 |
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| SAFETY | ||||||||
| SAFETY | 57 |
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| COMBINED | ||||||||
| COMBINED | 97 |
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ANALYSIS: With an Obermatt Combined Rank of 97 (better than 97% compared with investment alternatives), Canadian Utilities (Multi-Utilities, Canada) shares have much better financial characteristics than comparable stocks. Shares of Canadian Utilities are a good value (attractively priced) with a consolidated Value Rank of 93 (better than 93% of alternatives), are safely financed (Safety Rank of 85, which means low debt burdens), but show below-average growth (Growth Rank of 47). ...read more
RECOMMENDATION: A Combined Rank of 97, is a strong buy recommendation based on Canadian Utilities's financial characteristics. As the company Canadian Utilities's key financial metrics exhibit good value (Obermatt Value Rank of 93) but low growth (Obermatt Growth Rank of 47) while being safely financed (Obermatt Safety Rank of 85), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 93% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. ...read more
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