A lot of people do not like Just Energy Group Inc. (TSX:JE)(NYSE:JE), which is a leading re-seller of electricity and natural gas in Canada and several states.
The company’s aggressive sales tactics earn the wrath of consumers who are tired of Just Energy reps knocking on their door during dinner time. Many of these employees are accused of stretching the truth during their sales pitches, sticking customers in long-term contracts that aren’t as attractive as first thought.
But there’s a lot more to the company than just customer complaints on the Internet. The majority of its revenue comes from commercial clients, businesses who have a compelling reason to lock in electricity or natural gas rates.
Although the company has suffered from inconsistent profits leading to a dividend cut in 2013 and again in 2014, the stability of the 7% yield looks pretty strong today. In the last 12 months, free cash flow has been $133 million while dividends were just $75 million.
Additionally, two of Canada’s richest men have significant stakes in the company. Ron Joyce, who built Tim Hortons into a powerhouse, owns 18.7 million shares. Jim Pattison, who Canadian Business ranks as Canada’s fourth richest man, owns more than 25 million shares.
Even though 71% of customers currently come from the United States, Just Energy still has potential for growth south of the border, operating in only 19 states. It also has potential to grow in the United Kingdom, where it has operated since 2013, as well as other expansion opportunities into markets like Mexico, Japan, or other European countries.
