2 best TSX utility stocks for low-risk investors - CPX and BEP.UN

Be the First to Comment Read

2 best TSX utility stocks for low-risk investors - CPX and BEP.UN

Follow us on Google News:
 2 best TSX utility stocks for low-risk investors - CPX and BEP.UN
Image source: © 2022 Kalkine Media®

Highlights

  • Investors with low-risk appetites can generate quality returns in the long term with utility stocks.
  • CPX's price-to-earnings (P/E) ratio of 95.80 signals that it is currently an overvalued stock.
  • Brookfield Renewable's total production was 15,196 GWh in Q1 FY2022 compared to a year ago.

Investors with low-risk appetites can generate quality returns in the long term with utility stocks like Capital Power (TSX: CPX) and Brookfield Renewable (TSX: BEP.UN). They can also be comparatively safer as utility stocks are less cyclical in nature than stocks from some other sectors.

In other words, utility stocks are typically less affected when the economy turns down or markets crash, thereby minimizing the volatility risk. They can also offer dividends, increasing your passive income streams.

So, if you are a low-risk investor aiming to step into the stock market safely, you can consider these two TSX utility stocks.

Capital Power Corporation (TSX: CPX)

Capital Power is an independent power company that owns 27 power generation facilities, including renewable and thermal, to produce about 6,600 megawatts (MW). Capital Power generates and transmits sustainable power to communities across the US and Canada.

In March, the Edmonton-headquartered utility company executed commercial operations in its 41 MW facility, Strathmore Solar.

Capital Power produced 6,893 Gigawatt hours (GWh) of electricity in the first quarter of FY022 compared to 5,630 GWh a year earlier. The mid-cap company recorded a growing net profit of C$ 119 million in the latest quarter compared to C$ 101 million in Q1 2021.

The Canadian utility service company is expected to pay a quarterly dividend of C$ 0.547 per share on July 29. CPX's price-to-earnings (P/E) ratio of 95.80 signals that it is currently an overvalued stock in the stock market.

Also read: Tonix (TNXP) stock soars after monkeypox-related patent. Buy call?

Brookfield Renewable Partners L.P. (TSX: BEP.UN)

Brookfield Renewable is a pure-play renewable company that owns and operates hydroelectric, wind, solar and storage plants in Asia, Europe, South America and North America. 

The C$ 12-billion market cap company is confident that rising inflation and supply chain worries will not affect the global clean energy transition. The utility provider also added that they are 'well-positioned' to deliver new energy-efficient projects to decarbonize.

Brookfield Renewable's total production was 15,196 GWh in the first three months of FY2022 compared to 13,828 a year ago. The large-cap power generation company is set to deliver a quarterly dividend of US$ 0.32 per share on June 30.

2 best TSX utility stocks for low-risk investors - CPX and BEP.UN

Also read: WSP to acquire Wood’s Environment and Infrastructure unit. Buy alert?

Bottomline

Capital Power and Brookfield Renewable can grow significantly with the increased focus on the green energy transition and the urgency to address climate change threats. Rocketing oil and gas prices have further sparked interest in renewable energy production, which could also benefit these two TSX companies.

Please note, the above content constitutes a very preliminary observation based on the industry, and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks. 

Disclaimer

Featured Articles

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK