Capital Power (TSX:CPX) & AltaGas (TSX:ALA): 2 Utility Stocks To Buy

May 04, 2021 02:18 AM AEST | By Team Kalkine Media

Capital Power (TSX:CPX) & AltaGas (TSX:ALA): 2 Utility Stocks To Buy — Image source: carlos castilla,Shutterstock

Capital Power Corporation (TSX:CPX)

North American power producer Capital Power's market cap stands at C$ 4.2 billion. It holds a price-to-cash flow (P/CF) ratio of 6.7, a debt-to-equity (D/E) ratio of 1.27, and offers a return on equity of 2.7 per cent, as per TMX.

Capital Power also distributes a quarterly dividend of C$ 0.512. Its current dividend yield is 5.2 per cent.

Over the past week, Capital Power stock grew by about three per cent. It ballooned by about 50 per cent over the past one year.

1-year chart of stock performance of Capital Power (Source: Refinitiv/Thomson Reuters)

The company’s electricity generation increased to 5,630 Gigawatt Hours in the first quarter ending 31 March 2021, up from that of 5,526 Gigawatt Hours in Q1 2020.

Capital Power’s gross margin also surged to C$ 405 million in Q1 2021, while its operating income increased to C$ 156 million.

AltaGas Ltd (TSX:ALA)

AltaGas Ltd recorded a normalized EBITDA of C$ 674 million in the latest quarter, beating the Street forecast estimate of C$ 580 million, according to the data from Thompson Reuters/Refinitiv.

The company's normalized earnings per share (EPS) surged by 63 per cent year-over-year (YoY) to C$ 1.29 in Q1 2021. Its normalized net income also increased to C$ 361 million in the latest quarter.

1-year chart of stock performance of AltaGas (Source: Refinitiv/Thomson Reuters)

AltaGas has a price-to-earnings ratio of 12.8 and a return on assets of 2.3 per cent. The utility company distributes a monthly dividend of C$ 0.083, which holds a current dividend yield of 4.4 per cent.

The utility stock soared 42 per cent in the past one year and it registered a growth of 20 per cent in the last three months. The shares also hit a 52-week high of C$ 23.23 on Friday, April 30, before closing at C$ 22.97 apiece.

The above constitutes a preliminary view and any interest in stocks should be evaluated further from an investment point of view.

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