There was a lot of off and on panic selling in the Markets since the 10th of October over more US tariff threats and last week with a couple regional banks eating bad loans causing a short term panic that a US regional bank may go under which hasn't happened so far. A couple US banks went off the rails last year which surprised investors and not a good situation all around. That flowed over into the Canadian Market for a short term dip.
I read about these events and think more about buying low with my stocks and those on my Watch list. Not about selling. Apparently, that's what many a retail investor is doing as well. Trying to judge the bottom of slumps in the Market. Becoming more educated and using the well known Warren Buffet strategy but timing the market is not a good idea although one can get lucky.
With Halloween this month, there's more investor fear where many a news article is about the US Market being overvalued and something has to give. Perhaps in a couple years is the consensus but scary corrections can happen at any time.
Just my opinion here where I'm a DIY investor and pick/hold dividend paying stocks for the long term ... Utility stocks could be a good buffer when things go sour in the Markets, either for the short or for the long term.
However, I think the sector is getting additional hype over construction of AI data centres and their need for a steady source of high power usage and water for cooling. Green sources like solar panels and wind farms will come into play as well but natural gas, oil and even coal fired power turbines are more reliable, as well as nuclear power.
Emera, EMA.TO, is on my schedule to buy before the 31st of this month. It's a utility based in Nova Scotia and the company has no current plans to power data centres. Emera has operations in the US as well, mainly in Florida.
Going by the Graham Number I follow to judge if a company is under or overvalued, EMA.TO has a current Graham Number of around $45 CAD and with a current price of $69 which makes the stock overvalued.
The company did raise it's dividend by 1% with a current yield of 4.26%. Emera has put more focus on their forward guidance of keeping the stock's EPS in the range of 5 to 7% per year until 2027 with more details to come on the November 7th; 3rd quarter earnings call, including information about their operations over the next 3 years.
Emera is an example of investing decisions to make where it's an overvalued marketplace and probably will continue into 2026, bar any short term dips/corrections caused by politics, tariffs, AI bubble and the list goes on that could cause a drop in portfolio values.
Looking at the November 7th ex-dividend date, Atco Ltd/Canada, ACO-X.TO ... is a stock I've been watching. Undervalued at this time and it's listed on Norman Rothery's Stable Dividend Portfolio/Low volatility in today's Globe and Mail article.
Atco Ltd is more than a utility and provides services internationally. More about ACO-X in early November.
1 Year chart with EMA.TO in grey with a 30% gain. ACO-X.TO in red with a 10.26% gain. In green and orange are low volatility ETFs, ZLB.TO (20%) and TCLV.TO (16.49%). I own TCLV.TO.
Meanwhile, RCDC.TO is on my list this week to further buy and I have mentioned the ETF in past articles. I bought when it launched in January, 2023 with a decent performance of 12.2% since inception. The top ten holdings are popular dividend paying stocks.
Have a Happy Halloween.
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