1 Stock to Buy If the Bank of Canada Keeps Cutting Rates
1 Stock to Buy If the Bank of Canada Keeps Cutting Rates
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If the Bank of Canada keeps cutting interest rates, it will presumably be good news for most Canadians, financially speaking. Lower interest rates mean lower borrowing costs, and the bank cutting them would presumably mean that progress is being made in the fight against inflation.
如果加拿大银行继续降低利率,那对大多数加拿大人而言,从财务上来说,这显然是好消息。利率降低意味着借款成本降低,银行降低利率意味着在打击通货膨胀方面取得了进展。
For homeowners and other average Canadians, interest rate cuts would be a blessing. They would be a blessing for most stock investors, too; however, there are certain individual stocks that would suffer in a lower interest rate scenario. Many financials would report lower net interest income, for example. Certain types of stocks benefit from the capital cheapening/opportunity cost-lowering effects of interest rate cuts more than others. In this article, I will explore one TSX stock that would likely respond very positively to a fall in interest rates.
对于房主和其他一般加拿大人来说,降低利率是一件好事。股票投资者大多也会从降低利率中受益,然而,有些个别股票会在利率低的情况下受到影响。举个例子,许多金融股票的净利息收入较低。某些类型的股票在利率下降的情况下比其他股票更容易从资本便宜化/机会成本降低的影响中受益。本文将探讨一只tsx股票,该股票可能会对利率下降做出非常积极的反应。
Fortis
fortis
Fortis (TSX:FTS) is exactly the kind of stock you want to be holding in a scenario where the Bank of Canada continues cutting interest rates. As a regulated utility, it has a high level of debt, and all that debt becomes cheaper to service when rates go down. As a result, Fortis can reasonably be expected to deliver higher earnings if interest rates come down further. Its stock should also rise in the markets in the same scenario.
Fortis( TSX : FTS )恰好是你希望在加拿大银行继续降低利率的情况下持有的股票。作为一家受监管的公用事业公司,其负债程度很高,当利率下降时,所有这些负债变得更容易维持。因此,如果利率进一步下降,可以合理地预计Fortis将提供更高的收益。在同一情况下,其股票价格也应该在市场上上涨。
Good revenue growth offset by high interest expense
高利息支出抵消良好的营业收入增长
Although Fortis's sales have increased considerably over the last five years, its stock has barely risen. This has occurred despite the company's revenue rising in the same period.
尽管Fortis的销售额在过去五年大幅增加,但其股票几乎没有上涨。这种情况发生在公司的营业收入在同期增长的情况下。
One reason for this is that the company's admittedly growing revenue has been offset by rising interest expenses. Over the last five years, Fortis's revenues grew at 5.5% per year, but its finance charges (a category that includes interest and lease payments) grew at 6% per year. A consequence of this was that the company's earnings per share grew more slowly than revenue, at a 4% compounded rate. Some dilution (increase in the number of shares) also contributed to earnings lagging revenue.
其中一个原因是公司的营业收入增加的确抵消了不断上升的利息支出。在过去的五年中,Fortis的营收以每年5.5%的速度增长,但其财务费用(包括利息和租赁付款在内的一类)以每年6%的速度增长。其结果是,该公司的每股收益增长速度比营收要慢,以4%的复合率增长。股票的股份也增加了一些,导致收益落后于营收。
The above partially explains Fortis's lacklustre stock performance over the last five years. However, it also points to a potentially better future. Because Fortis's earnings have taken a hit from rising interest expenses, said earnings should see an improvement from interest rate cuts. Falling interest rates result in an immediate reduction in the cost of variable rate debt and an eventual decrease in the cost of fixed rate debt, as it is eventually re-financed at a lower interest rate. Fortis will benefit from both of these effects if the Bank of Canada keeps cutting rates.
以上部分原因部分解释了Fortis在过去五年中股票表现低迷的原因。然而,这也指向了一个有潜力的更好的未来。由于Fortis的收益受到不断上升的利息支出的打击,如果加拿大银行继续降息,这样的收益应该会更好。利率下降会使可变利率债务成本立即降低,并最终降低固定利率债务成本,因为到最后会以较低的利率再融资。如果加拿大银行继续降息,Fortis将从这两种效应中受益。
A decent balance sheet
体面的资产负债表
Another big thing that Fortis has going for it right now is a good balance sheet. It has $27.5 billion in debt to $20.5 billion in common equity for a 1.35 debt-to-equity ratio. The ratio of debt to total equity is 1.15. These numbers are pretty modest for a utility stock. On a less flattering note, the company has more current liabilities than current assets for a sub-one current ratio. That isn't a positive, but the ratio (0.59) is not so bad that investors should fear immediate liquidity issues.
Fortis现在另一个很重要的优势是一个良好的资产负债表。其债务为275亿美元,普通股权为20.5亿美元,债务与股本比率为1.35。债务总额占总股本比率为1.15。这对于公用事业股票来说是相当适度的数字。说不到好听的话,公司的流动负债超过了流动资产,呈现出不到一流的流动比率。但比率(0.59)还不至于让投资者担心立即的流动性问题。
Considerable dilution
相当大的稀释
On a less positive note for Fortis, the company has diluted its equity considerably over the years, with the share count rising by 2.7% per year over the last five years. This isn't such a good thing, although earnings have grown faster than the share count, resulting in the already mentioned 4% growth rate in earnings per share. The earnings growth rate has more or less been adequate to support the company's dividend hikes. On the whole, Fortis appears to be a reasonably sensibly run company and a potential beneficiary of future rate cuts.
对于Fortis而言,另一个不是那么积极的因素是,公司在过去的几年中显著稀释了其股权,股份在过去五年中每年增长2.7%。虽然这不是一件好事,但收益增速超过了股份数量,导致了上面提到的每股收益增长率达4%。收益增长率或多或少已经足够支撑公司的股息增长。总体而言,Fortis看起来是一家管理合理的公司,也是未来利率下降的潜在受益者。
The post 1 Stock to Buy if the Bank of Canada Keeps Cutting Rates appeared first on The Motley Fool Canada.
本文最初发表于 The Motley Fool Canada。