The Canadian utilities space is one which many investors have sought to avoid in recent years as the Bank of Canada has begun to raise interest rates in earnings, decreasing the relative attractiveness of these bond-like equity securities in such an environment.
While the sector as a whole has been hit quite hard, I'm going to discuss one utility which has been a top performer of late, for a number of reasons.
Capital Power Corp. (TSX:CPX) is certainly one of the lesser-known utilities companies in the Canadian space, focusing primarily on green energy generation and other "non-traditional" forms of power creation which have remained largely on the fringe for investors focused on sustainable or environmentally friendly investing options.
Capital Power has since gone somewhat mainstream as carbon taxes and other negative regulatory events relating to pipelines in the oil & gas space have hurt traditional power generation, making the product Capital Power produces more attractive on a relative basis.
The company carries a distribution of approximately 6.2%, making this a great company for income focused investments. This yield has accompanied significant capital appreciation in recent years as investors have flocked toward green energy stories such as Capital Power.
From a growth and momentum perspective, this is an excellent play in what could only otherwise be considered a rather dismal market for utilities a the present moment.
Invest wisely, my friends.
