Portfolio Update
The FiveTwenty portfolio received $145.86 in dividends in the past week. BEN and LEG paid their quarterly dividend during the week.
| Past Week Dividend | $145.86 |
| Current Quarter Dividend (Q4 2022) | $225.45 |
| LifeTime Dividend | $6,520.73 |
| Estimated Annual Dividend | $6,717.43 |
The capital allocation for the week of 10/16/2022 to 10/22/2022 will be used to add to our position in Fortis (NYSE: FTS).
FTS – Position Update
Since our last check-in on FTS in week 49 of 2022, the company reported FY 2021 earnings on 02/11/2022, as well as earnings for Q2 2022, the most recent quarter. In addition the share price decreased 10.7% from C$56.31 to C$50.27.
| TTM | Prev. Update | 10-year median | |
| Dividend Streak | 49 years | 48 years | |
| Yield | 4.30% | 3.64% | 3.57% |
| Payout Ratio | 81.7%1 | 77.36%2 | |
| P/E | 19.191 | 21.252 |
1 computed using TTM adjusted EPS of C$2.62 as of Q2 2021
2 computed using TTM adjusted EPS of C$2.65 as of Q3 2021
Q2 2022 earnings report
Did FTS’s latest earnings report raise any warning flags?
In Q2 2022, FTS grew revenue, adjusted net income and adjusted EPS compared to the same period a year ago. The same trend has held for year-to-date financial performance with all there financial metrics also growing. Overall, in Q2 2022, revenues grew 16.8%, adjusted net income increased 5% and adjusted EPS were 3.6% higher.
| Revenue (in millions) | Adj. Net Income (in millions) | Adj. EPS . | |
| Q2 2021 | C$2,130 | C$259 | C$0.55 |
| Q2 2022 | C$2,487 | C$272 | C$0.57 |
| % Change | 16.8% | 5.0% | 3.6% |
Additional noteworthy developments during the quarter:
- On 09/28/2022, FTS increased its quarterly dividend by 6% to C$0.565 per share. This represents the 49th consecutive yearly dividend increase for the company.
Looking ahead, the company re-affirmed its 6% dividend growth guidance through 2025. FTS expects the dividend growth to be supported by the 6% CAGR in rate base fueled by its 5 year capital expenditure plan it commenced in 2021.
Thesis
Why are we adding to our position in FTS?
We continue to believe the ability of FTS to continue to pay out a growing dividend. Therefore, we consider the current slight pullback in share price as an opportunity to add to our position at an attractive valuation and starting yield.
Previous Articles
Photo by Johannes Plenio on Unsplash
One Reply to “2022 Week 42: Fortis (NYSE: FTS)”
Comments are closed.