Stock of the Day

November 6, 2019

Fortis (FTS)

$44.07
+$0.29 (+0.7%)
Market Cap: $21.86B

About Fortis

Fortis Inc. operates as an electric and gas utility company in Canada, the United States, and the Caribbean countries. It generates, transmits, and distributes electricity to approximately 447,000 retail customers in southeastern Arizona; and 103,000 retail customers in Arizona's Mohave and Santa Cruz counties with an aggregate capacity of 3,408 megawatts (MW), including 68 MW of solar capacity and 250 MV of wind capacity. The company also sells wholesale electricity to other entities in the western United States; owns gas-fired and hydroelectric generating capacity totaling 65 MW; and distributes natural gas to approximately 1,087,000 residential, commercial, and industrial customers in British Columbia, Canada. In addition, it owns and operates the electricity distribution system that serves approximately 592,000 customers in southern and central Alberta; owns four hydroelectric generating facilities with a combined capacity of 225 MW; and provides operation, maintenance, and management services to five hydroelectric generating facilities. Further, the company distributes electricity in the island portion of Newfoundland and Labrador with an installed generating capacity of 145 MW; and on Prince Edward Island with a generating capacity of 90 MW. Additionally, it provides integrated electric utility service to approximately 69,000 customers in Ontario; approximately 275,000 customers in Newfoundland and Labrador; approximately 34,000 customers on Grand Cayman, Cayman Islands; and approximately 17,000 customers on certain islands in Turks and Caicos. It also holds long-term contracted generation assets in Belize consisting of 3 hydroelectric generating facilities with a combined capacity of 51 MW; and the Aitken Creek natural gas storage facility. It also owns and operates approximately 90,500 circuit Kilometers (km) of distribution lines; and approximately 51,600 km of natural gas pipelines. Fortis Inc. was founded in 1885 and is headquartered in St. John's, Canada.

Fortis Bull Case

Here are some ways that investors could benefit from investing in Fortis Inc.:

  • Fortis Inc. has shown a strong market presence with a current stock price of $44.81, reflecting a recent increase of 1.1%, indicating positive market sentiment.
  • The company has a significant market capitalization of approximately $22.37 billion, which suggests stability and the ability to invest in growth opportunities.
  • Institutional investors and hedge funds own 57.77% of Fortis Inc., which often indicates confidence in the company's long-term performance and stability.
  • Recent filings show that Van ECK Associates Corp increased its stake in Fortis by 9.1%, demonstrating growing institutional interest and potential for future growth.
  • Fortis Inc. maintains a relatively low beta of 0.50, suggesting that its stock is less volatile compared to the market, which can be appealing for risk-averse investors.

Fortis Bear Case

Investors should be bearish about investing in Fortis Inc. for these reasons:

  • Raymond James recently downgraded Fortis from an "outperform" rating to a "market perform" rating, which may indicate a less favorable outlook from analysts.
  • Two analysts have issued sell ratings on Fortis Inc., suggesting that there may be concerns about the company's future performance.
  • The company has a debt-to-equity ratio of 1.32, which indicates a higher level of debt compared to equity, potentially raising concerns about financial stability.
  • Fortis Inc. has a price-to-earnings (P/E) ratio of 18.83, which may be considered high compared to industry averages, suggesting that the stock could be overvalued.
  • Recent trading volumes have varied significantly, with a notable increase to 7,646,555 shares traded, which could indicate volatility and uncertainty in investor sentiment.

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