Low Volatility Utility Stocks for October, 2025

 

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.

Model Portfolios and ETFs for October, 2025

 

It's fall and nice to see the scenery with the leaves changing colors. The NHL hockey season starts this week. High expectations for Canadian teams to gain more points and get into the Stanley Cup finals. It's a long season and like the stock market, it reminds me of the old saying, "you can't score unless you shoot".

I look forward to looking over updates on model portfolios that are similar to mine. In the Globe and Mail, Gordon Pape headlines with Driven by Falling Rates, my High Yield Portfolio continues to soar, averaging 10% gain annually. Mr. Pape updates quarterly on the holdings, progress and sells if any with none reported for September.

With monthly updates, also on the Globe and Mail, John Heinzl's Model Dividend Growth Portfolio as of September 30th, 2025 followed by an additional article recently on the 4th of October, Eight Years on my Dividend Portfolio keeps Churning out Cash. Mr Heinzl owns the majority of the holdings personally.

It's easy to dissect the winners and laggers from these portfolios but over the years circumstances and interest rates change. For example, Enbridge, ENB.TO which has surprisingly surged 60% since it's lows a few years back with an attractive yield. I've held Enbridge for years. 

The stocks I have in common are many such as all the top 5 Canadian banks individually and in ETFs, energy/power, pipelines, insurance sector and companies like the Power Corporation of Canada, POW-T which has an umbrella like portfolio with companies like Great-West Life, GWO.TO,

Common with the two portfolios are companies like Enbridge, Pembina Pipeline, Capital Power and CIBC bank I own while others I looked at are not of interest to me but are to others. 

John Heinzl mentioned in his October 4th article that he sees an ETF such as Blackrock's XDIV as being good alternative instead of holding and keeping track of the individual stocks.  

I had to check it out. iShares Core MSCI Canadian Quality Dividend index ETF has a low management expense ratio of 0.11%. That's a plus with the top ten holdings I own individually being: TD Bank, Royal Bank, Suncor Energy, Manulife Financial, Sunlife Financial, Fortis, Pembina Pipeline, Power Corporation of Canada, Tourmaline Corp and Emera.  

Except for Suncor Energy, SU.TO and Tourmaline Oil Corp, TOU.TO, the other stocks mentioned above are mixed into the two model portfolios I mentioned.

I prefer pipelines rather than companies dealing with the ups and downs of commodity prices like oil and natural gas. 

Tourmaline is the only company at this time I'm watching more closely where natural gas is a popular subject these days but with current lower prices depending on the country and region. They have a new contract to supply Europe with natural gas while shipping to the BC natural gas ports which loads tankers bound for Asia. I'm sure management is experienced in adjusting to the ups and downs of the commodity. 

 

With XDIV, I'm also looking for growth as a bonus. With a near 19% gain for the year, and around 22% with distributions, XDIV is looking good and about matches my performance for the year.  The monthly distributions align with it's current 4% yield.

A decent ETF to hold that adjusts holdings to maintain performance.

On my list to further buy in October before the ex-dividend date of October 10th, 2025 is TD.TO which has certainly surged in stock price with a "year to date" gain of 48%.

What I'm debating is ... will some investors sell all or partially for the gains or does TD have more room to run with the new CEO saying he has investors in mind with share buybacks coming and boosting earnings per share higher in 2026. 

An individual investor's decision trying to keep human emotional thinking checked and try to get direction from the data available and current news. Not always easy. 

With the current bull run, some stocks are getting overvalued. Eventually, as history shows there will be another market correction where buying at lower prices comes to mind.

My alternative bank buy will be adding to ZWB, BMO Covered Call Banks ETF with a 16% gain year to date, monthly distributions and a generous 6% yield with net assets of 3.5 billion.

In the 2nd half of October, I'll be looking at Emera, EMA.TO which recently announced a dividend increase and ETFs I have an interest in with October being one of the slower months this year for quarterly dividend declarations with my stocks while November will ramp up again with several stocks on my additional buy list while looking over my growing Watchlist holdings to perhaps add to the portfolio.