FTS Stock: Buy, Sell, or Hold?

Here’s why Fortis (TSX:FTS) deserves either a buy or hold rating, depending on whether investors own this stock or not.

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There is this dilemma among investors in 2023 to choose a specific industry to invest in. After everything that has happened to the market in the past two to three years, it can be quite confusing for investors at the moment. 

More than half of 2023 has passed, and we have seen some of the top-performing stocks crash while some low-key stocks have soared. However, Canadian energy sector stocks have always made it among the top TSX stocks. 

Investors who bet their funds on energy stocks must be familiar with the name Fortis (TSX:FTS).

Is FTS worth investing in in August 2023? Let’s find out. 

What does Fortis’s EPS say about its growth? 

Earnings per share (EPS) growth is one of the factors that an investor looks for when deciding to invest in a particular stock. Fortis’s EPS can certainly encourage an investor to add it to their portfolio. Why? Fortis achieved an 11% increase in its trailing 12-month EPS over the past year, rising from $2.65 to $2.94, which undoubtedly brought satisfaction to its shareholders.

Additionally, Fortis has managed to maintain a consistent EBIT (earnings before interest and taxes) margin while simultaneously boosting its revenue by 15% to $12 billion. 

There have been some selling and buying of FTS shares by significant shareholders. However, the number of sales has been overshadowed by the number of purchases of $1.8 million in the last year. In this regard, it should also be noted that President David Hutchens has made the largest investment worth $1.0 million, which translates to $53.33 per share. 

Fortis and its quarterly earnings 

Fortis has recently announced its quarterly earnings report for the quarter that ended on August 2nd. Delightedly, the company has shown remarkable consistency and resistance in moving market conditions, and its financial performance has met analysts’ estimates. 

Fortis has reported quarterly earnings of $0.46 per share. The figure shows consistency when compared to last year’s EPS of $0.44 during that quarter. The company accumulated revenue of $1.93 billion for the quarter. This figure, however, did not match the analysts’ expectations. But it is important to note that the gas and utility company has remained profitable during prevailing market conditions. 

The company earned an ROE (return on equity) of 6.68% for the quarter and maintained a decent net margin of 12.40%.

Additionally, Fortis has also announced its dividend payment for this quarter, which will be distributed on Sept. 1. Shareholders on record as of Aug. 21 will receive a dividend payout of $0.427 per share, which turns to an annualized dividend of $1.71 per share and a dividend yield of 4.25%.

Bottom line

Fortis is a growing business that has shown some remarkable growth in the past few years. Also, the decent number of insiders and shareholders buying its shares shows that those who know the company the best are optimistic about its performance. Hence, Fortis deserves a buy or hold rating. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool recommends Fortis. The Motley Fool has a disclosure policy.

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