ATCO vs Canadian Utilities

ATCO and Canadian Utilities are two of the leading utilities companies in Canada, each with a long history of providing essential services to customers. Both companies operate in the energy and infrastructure sectors, offering a diverse range of services including electricity, natural gas, and pipelines. While ATCO is known for its focus on power generation and distribution, Canadian Utilities has a strong presence in both the utility and construction industries. Investors seeking exposure to the Canadian utilities sector may consider evaluating the performance and potential of these two companies.

ATCO or Canadian Utilities?

When comparing ATCO and Canadian Utilities, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between ATCO and Canadian Utilities.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. ATCO has a dividend yield of 4.13%, while Canadian Utilities has a dividend yield of 5.08%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. ATCO reports a 5-year dividend growth of 3.96% year and a payout ratio of 56.36%. On the other hand, Canadian Utilities reports a 5-year dividend growth of 6.94% year and a payout ratio of 86.32%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with ATCO P/E ratio at 13.91 and Canadian Utilities's P/E ratio at 15.84. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. ATCO P/B ratio is 1.19 while Canadian Utilities's P/B ratio is 1.40.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, ATCO has seen a 5-year revenue growth of -0.02%, while Canadian Utilities's is -0.13%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with ATCO's ROE at 8.64% and Canadian Utilities's ROE at 8.87%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $34.63 for ATCO and $25.99 for Canadian Utilities. Over the past year, ATCO's prices ranged from $24.78 to $36.07, with a yearly change of 45.56%. Canadian Utilities's prices fluctuated between $20.70 and $31.00, with a yearly change of 49.76%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.