4 utility stocks defensive investors can explore: CPX, BLX, ACO & EMA

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4 utility stocks defensive investors can explore: CPX, BLX, ACO & EMA

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 4 utility stocks defensive investors can explore: CPX, BLX, ACO & EMA
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  • The TSX utility index climbed over six per cent in 2022
  • Canada’s main stock index, which slipped by almost six per cent this year
  • Boralex stock spiked by nearly 45 per cent year-to-date

Investors aiming to play safe considering the ongoing economic environment can explore TSX utility stocks like Capital Power (TSX: CPX), Emera (TSX: EMA), Boralex (TSX: BLX) etc., for their portfolio.

The S&P/ TSX Capped Composite Index posted a triple-digit loss for the second session in a row to close at 19,974.92 on Monday, August 22, down by 136.46 points. This backdrop came as inflation worries continue to affect market sentiments ahead of the scheduled Federal Reserve meeting on August 26.

The TSX utility index climbed over six per cent in 2022, thereby outshining Canada’s main stock index, which slipped by almost six per cent this year. Canadians with limited risk appetite can look into utility companies as such businesses are less likely to be affected by market adversities due to the nature of their products and services.

Keeping these factors in mind, let us talk about the following Canadian utility stocks picked by Kalkine Media® that one can explore amid the current market fluctuations.

1.     Capital Power Corporation (TSX: CPX)

Capital Power saw its electricity production jump to 6,638 Gigawatt hours (GWh) in Q2 2022, notably up from 4,975 GWh reported in the same quarter a year ago. The mid-cap electricity producer also improved its generation facility availability to 92 per cent in the latest quarter compared to 84 per cent in Q2 2021. The C$ 5.9 billion market cap company reported basic earnings per share of C$ 0.59 in the second quarter of this fiscal year, significantly up from C$ 0.05 per share posted in Q2 2021.

Capital Power scrip rose by over 28 per cent year-to-date (YTD). As per Refinitiv data, the CPX scrip appears to be on a high momentum with a Relative Strength Index (RSI) value of 69.03 on August 22.

2.     Boralex Inc (TSX: BLX)

Boralex reported increased revenues from energy sales and feed-in premium of C$ 168 million in Q2 2022, up by 14 per cent year-over-year (YoY). The renewable power producer saw its operating income rise by 89 per cent YoY to C$ 45 million in the latest quarter. Boralex improved its profitability by posting a net income of C$ 14 million in the second quarter this year, comparatively high from a loss of C$ 12 million in Q2 2021.

Boralex stock spiked by almost 45 per cent YTD. According to Refinitiv information, the BLX stock saw an RSI value of 72.46 (above the overbought category) on August 22.

4 Canadian utility stocks to buy right now: CPX, BLX, ACO.X and EMA ©Kalkine Media®; ©Garis Studio via Canva.com

3.     ATCO Ltd (TSX: ACO.X)

ATCO is a mid-cap holding firm, with Canadian Utilities (TSX: CU) as its biggest subsidiary. ATCO will distribute a quarterly dividend of C$ 0.462 on September 30. The utility solution company said its adjusted net earnings were C$ 92 million in Q2 2022, higher than C$ 80 million in the same period last year.

As for its stock performance, ATCO stock jumped by over 15 per cent in six months. As per Refinitiv findings, ACO.X stock had an RSI value of 68.13 on August 22, representing a bullish trend in the stock market.

4.  Emera Incorporated (TSX: EMA)

Emera is a large-cap utility infrastructure and service company. Emera reported YoY growth of nine per cent in its adjusted earnings per share (EPS) to C$ 0.59 in Q2 2022. Emera also stated that with nearly C$ 1,1 billion of capital investment in clean and ‘reliable’ energy in the initial two quarters, it is on track to execute its capital plan for 2022.

Emera stock swelled by almost four per cent quarter-to-date (QTD). As per Refinitiv data, the EMA stock had an RSI value of 62.51 on August 22.

Bottom line

Market fluctuations could be hard to digest for low-risk investors. Hence, such investors can explore the TSX utility stocks discussed above amid the volatile market environment.

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.


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