Portfolio Update
The FiveTwenty portfolio received $46.20 dividends in the past week. VFC and LMT paid their quarterly dividend during the week.
| Past Week Dividend | $91.20 |
| Current Quarter Dividend (Q2 2023) | $2,144.25 |
| LifeTime Dividend | $12,317.83 |
| Estimated Annual Dividend | $9,733.99 |
The capital allocation for the week of 06/25/2023 to 07/01/2023 will be used to add to our position in Fortis (NYSE: FTS).
FTS – Position Update
Since our last check-in on FTS in week 42 of 2023, the company reported FY 2022 earnings on 02/10/2023, and Q1 2023 earnings on 05/03/2023. In addition, the share price increased from C$50.27 to C$55.43 during that period.
| TTM | Prev. Update | 10-year median | |
| Dividend Streak | 49 years | 49 years | |
| Yield | 4.02% | 4.30% | 3.58% |
| Payout Ratio | 80.4%1 | 81.7%2 | |
| P/E | 19.051 | 19.192 |
1 computed using TTM adjusted EPS of C$2.91 as of Q1 2023
2 computed using TTM adjusted EPS of C$2.62 as of Q2 2022
Q1 2023 earnings report
Did FTS’s latest earnings report raise any warning flags?
Following a strong FY 2022, FTS grew revenue, adjusted net income and adjusted EPS again in Q1 2023 compared to the same period in 2022. Overall, in Q1 2023, revenue grew 17.1%, adjusted net income increased 19%, and adjusted EPS were 16.7% higher.
| Revenue (in millions) | Adj. Net Income (in millions) | Adj. EPS . | |
| Q1 2022 | C$2,835 | C$369 | C$0.78 |
| Q1 2023 | C$3,319 | C$439 | C$0.91 |
| % Change | 17.1% | 19% | 16.7% |
Additional noteworthy developments during the quarter:
- On 05/01/2023, the company announced that it has entered into a definitive share purchase and sale agreement with a subsidiary of Enbridge Inc. to sell its 93.8% ownership interest in Aitken Creek Natural Gas Storage Facility for $400 million. The transaction is expected to close by the end of the year with a 03/31/2023 effective date.
Looking ahead, the company expects long-term dividend growth of 4-6% annually through 2027. The dividend growth will be supported by a 6.2% CAGR in base rate between 2022 and 2027.
Thesis
Why are we adding to our position in FTS?
In the period we have own the company’s shares, FTS has steadily executed on its capital allocation plan to increase base rate. This in turn has allowed to company to deliver on its dividend growth targets.
We are, therefore, happy to continue building our position in FTS.
Previous Articles
- 2022 Week 42: Fortis (NYSE: FTS)
- 2021 Week 49: Fortis (NYSE: FTS)
- 2021 Week 24: Fortis (NYSE: FTS)
- 2021 Week 12: Fortis (NYSE: FTS)
Additional Research
Photo by Andrey Metelev on Unsplash