Canadian Utility Stock Down 20%: A Buying Opportunity?
Utility dips can be buying opportunities, so it's essential to check Hydro One's earnings, debt, and regulator outlook before adding on a pullback.
When a utility stock on the TSX dips, it can look tempting, but before jumping in, it's smart to understand why it's down and what that means for the long term. Utilities are usually the definition of stability: steady dividends, predictable cash flow, and regulated rates.
Key Factors to Consider
- Earnings and guidance: A weak quarter can knock down share prices, especially if management cuts its growth outlook or faces unexpected costs.
- Regulation: Utilities rely on approval from provincial regulators to raise rates and recover costs.
A weak quarter can knock down share prices, especially if management cuts its growth outlook or faces unexpected costs.
Author's summary: Consider Hydro One's earnings and regulator outlook before buying.