OTCPK:CDUT.F

Stock Analysis Report

Executive Summary

Canadian Utilities Limited and its subsidiaries engage in the electricity, pipelines and liquids, and retail energy businesses worldwide.

Rewards

Trading at 55.3% below its fair value

Earnings grew by 55.9% over the past year

Pays a high and reliable dividend of 5.23%

Risk Analysis

Earnings are forecast to decline by an average of -13.6% per year for the next 3 years

Interest payments are not well covered by earnings

Shares are highly illiquid

Large one-off items impacting financial results



Snowflake Analysis

Undervalued established dividend payer.


Similar Companies

Share Price & News

How has Canadian Utilities's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CDUT.F's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-13.3%

CDUT.F

15.2%

US Integrated Utilities

5.3%

US Market


1 Year Return

n/a

CDUT.F

-6.3%

US Integrated Utilities

-10.7%

US Market

Return vs Industry: Insufficient data to determine how CDUT.F performed against the US Integrated Utilities industry.

Return vs Market: Insufficient data to determine how CDUT.F performed against the US Market.


Shareholder returns

CDUT.FIndustryMarket
7 Day-13.3%15.2%5.3%
30 Day-27.3%-6.6%-13.6%
90 Dayn/a-13.2%-19.8%
1 Yearn/a-3.0%-6.3%-8.9%-10.7%
3 Yearn/a18.9%6.9%15.5%8.0%
5 Yearn/a48.0%18.2%35.2%20.4%

Price Volatility Vs. Market

How volatile is Canadian Utilities's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Canadian Utilities undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CDUT.F ($13.87) is trading below our estimate of fair value ($31.02)

Significantly Below Fair Value: CDUT.F is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: CDUT.F is good value based on its PE Ratio (10.3x) compared to the Integrated Utilities industry average (19.7x).

PE vs Market: CDUT.F is good value based on its PE Ratio (10.3x) compared to the US market (13.1x).


Price to Earnings Growth Ratio

PEG Ratio: CDUT.F's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: CDUT.F is good value based on its PB Ratio (1.7x) compared to the US Integrated Utilities industry average (1.8x).


Next Steps

Future Growth

How is Canadian Utilities forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

-13.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CDUT.F's earnings are forecast to decline over the next 3 years (-13.6% per year).

Earnings vs Market: CDUT.F's earnings are forecast to decline over the next 3 years (-13.6% per year).

High Growth Earnings: CDUT.F's earnings are forecast to decline over the next 3 years.

Revenue vs Market: CDUT.F's revenue is expected to decline over the next 3 years (-0.3% per year).

High Growth Revenue: CDUT.F's revenue is forecast to decline over the next 3 years (-0.3% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CDUT.F's Return on Equity is forecast to be low in 3 years time (12.6%).


Next Steps

Past Performance

How has Canadian Utilities performed over the past 5 years?

11.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CDUT.F has a large one-off gain of CA$174.0M impacting its December 31 2019 financial results.

Growing Profit Margin: CDUT.F's current net profit margins (22.6%) are higher than last year (13%).


Past Earnings Growth Analysis

Earnings Trend: CDUT.F's earnings have grown by 11.1% per year over the past 5 years.

Accelerating Growth: CDUT.F's earnings growth over the past year (55.9%) exceeds its 5-year average (11.1% per year).

Earnings vs Industry: CDUT.F earnings growth over the past year (55.9%) exceeded the Integrated Utilities industry 5.7%.


Return on Equity

High ROE: CDUT.F's Return on Equity (13.8%) is considered low.


Next Steps

Financial Health

How is Canadian Utilities's financial position?


Financial Position Analysis

Short Term Liabilities: CDUT.F's short term assets (CA$1.7B) exceed its short term liabilities (CA$739.0M).

Long Term Liabilities: CDUT.F's short term assets (CA$1.7B) do not cover its long term liabilities (CA$12.4B).


Debt to Equity History and Analysis

Debt Level: CDUT.F's debt to equity ratio (129.6%) is considered high.

Reducing Debt: CDUT.F's debt to equity ratio has reduced from 130.6% to 129.6% over the past 5 years.

Debt Coverage: CDUT.F's debt is not well covered by operating cash flow (15.1%).

Interest Coverage: CDUT.F's interest payments on its debt are not well covered by EBIT (2.8x coverage).


Balance Sheet

Inventory Level: CDUT.F has a high level of physical assets or inventory.

Debt Coverage by Assets: CDUT.F's debt is not covered by short term assets (assets are 0.2x debt).


Next Steps

Dividend

What is Canadian Utilities's current dividend yield, its reliability and sustainability?

5.23%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: CDUT.F's dividend (5.23%) is higher than the bottom 25% of dividend payers in the US market (1.95%).

High Dividend: CDUT.F's dividend (5.23%) is low compared to the top 25% of dividend payers in the US market (5.4%).


Stability and Growth of Payments

Stable Dividend: CDUT.F's dividends per share have been stable in the past 10 years.

Growing Dividend: CDUT.F's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (52.1%), CDUT.F's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: CDUT.F's dividends in 3 years are forecast to be covered by earnings (78.7% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.2yrs

Average management tenure


CEO

Siegfried Kiefer (60yo)

0.83

Tenure

CA$2,113,889

Compensation

Mr. Siegfried W. Kiefer serves as President and Chief Executive Officer of Canadian Utilities Limited at ATCO Limited since 2019 and serves as President and Chief Executive Officer of CU Inc. Mr. Kiefer ha ...


CEO Compensation Analysis

Compensation vs Market: Siegfried's total compensation ($USD1.50M) is below average for companies of similar size in the US market ($USD7.28M).

Compensation vs Earnings: Siegfried's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Siegfried Kiefer
President & CEO0.83yrCA$2.11m0.036% CA$2.3m
Dennis DeChamplain
Executive VP & CFO2.67yrsCA$872.20k0.021% CA$1.4m
Wayne Stensby
Executive Vice President of Corporate Developmentno dataCA$1.07m0.013% CA$793.1k
George Lidgett
Executive VP & GM of Utilities0.58yrCA$1.22m0.011% CA$722.2k
Marshall Wilmot
President of Retail & Chief Digital Officerno dataCA$1.23mno data
Alan Skiffington
VP & Chief Information Officerno datano datano data
Myles Dougan
Senior Manager of Investor Relationsno datano datano data
Deanna Girard
Vice President of Human Resources1.67yrsno datano data
Brian Bale
Special Advisor to the CEO and Senior VP of IT & Real Estate2.67yrsCA$500.73kno data
J.D. Creaghan
Managing Director for Australia2.83yrsno data0.0040% CA$252.6k

2.2yrs

Average Tenure

57yo

Average Age

Experienced Management: CDUT.F's management team is considered experienced (2.2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Nancy Southern
Executive Chair7.25yrsCA$3.50m0.41% CA$26.0m
Charles Wilson
Independent Director20.17yrsCA$322.56k0.031% CA$2.0m
Robert Normand
Independent Director11.83yrsCA$245.40k0.0082% CA$516.5k
Linda Southern-Heathcott
Vice Chair of the Board3yrsCA$221.70k0.33% CA$20.6m
Laura Reed
Independent Director5.83yrsCA$285.70k0.0041% CA$257.6k
James Simpson
Independent Lead Director13.83yrsCA$328.10k0.012% CA$781.1k
Loraine Charlton
Independent Director13.83yrsCA$257.40k0.015% CA$963.4k
Matthias Bichsel
Independent Director5.83yrsCA$215.40k0.0052% CA$330.4k
Hector Rangel
Independent Director5.83yrsCA$221.40k0.0055% CA$347.5k
Wayne Wouters
Independent Director0.83yrno data0.00063% CA$39.9k

6.5yrs

Average Tenure

66.5yo

Average Age

Experienced Board: CDUT.F's board of directors are considered experienced (6.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Canadian Utilities Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Canadian Utilities Limited
  • Ticker: CDUT.F
  • Exchange: OTCPK
  • Founded: 1927
  • Industry: Multi-Utilities
  • Sector: Utilities
  • Market Cap: CA$8.950b
  • Listing Market Cap: CA$6.330b
  • Shares outstanding: 272.67m
  • Website: https://www.canadianutilities.com

Number of Employees


Location

  • Canadian Utilities Limited
  • West Building
  • 4th floor
  • Calgary
  • Alberta
  • T3E 8B4
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CU.XTSX (The Toronto Stock Exchange)Class B Common SharesCACADAug 1973
CDUU.FOTCPK (Pink Sheets LLC)Class B Common SharesUSUSDAug 1973
CUTSX (The Toronto Stock Exchange)YesClass A Non-Voting SharesCACADSep 1982
CUDDB (Deutsche Boerse AG)YesClass A Non-Voting SharesDEEURSep 1982
CDUA.FOTCPK (Pink Sheets LLC)YesClass A Non-Voting SharesUSUSDSep 1982
CU.PRETSX (The Toronto Stock Exchange)2ND PF SH SER BBCACADJul 2012
CU.PRFTSX (The Toronto Stock Exchange)CUMRED PFDSHS CCCACADMar 2013
CU.PRHTSX (The Toronto Stock Exchange)2ND PFD SER-EECACADAug 2015
CU.PRITSX (The Toronto Stock Exchange)4.5% 2ND PFD FFCACADSep 2015
CDUT.FOTCPK (Pink Sheets LLC)4.5% 2ND PFD FFUSUSDSep 2015

Biography

Canadian Utilities Limited and its subsidiaries engage in the electricity, pipelines and liquids, and retail energy businesses worldwide. It operates through Electricity, Pipelines & Liquids, and Corporate & Other segments. The Electricity segment provides electricity generation, transmission, distribution; and related infrastructure solutions in Alberta, Ontario, the Yukon, the Northwest Territories, in Canada, as well as in Australia and Mexico. The Pipelines & Liquids segment offers integrated natural gas transmission, distribution, and storage; industrial water solutions; and related infrastructure development throughout Alberta and the Lloydminster area of Saskatchewan in Canada, as well as Western Australia and Mexico. The Corporate & Other segment engages in retail electricity and natural gas businesses. The company was incorporated in 1927 and is headquartered in Calgary, Canada. Canadian Utilities Limited is a subsidiary of ATCO Ltd. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/31 03:50
End of Day Share Price2020/03/26 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.