The Utilities sector closed on Friday June 13, 2008 at $228.20.

The high over the last year was $234.39 on Oct 31, 2007 and the low was $202.07 on March 20, 2008. From the peak to the trough that represents a drop of –14.5% for the Utilities sector vs. the TSX, which dropped –11% and the S&P 500, which dropped -12.9%. Year-to-date the TSX is up about 6.8% and the S&P is down about –7.4% while the Utilities sector is down about –1.3%. Since March 20th the TSX is up over 13.5% and the S&P is up about 0.8% while the telecom sector is up 11.5%.

The chart suggests that we are in a positive upward channel, which is bullish for the Utilities sector. The current price crossed the 50-day moving average on April 23rd. It has managed to maintain its status above the 50-day moving average and above the 200 day moving average. Since March 24, 2008 we have both rising bottoms and rising tops represented by the upper and lower trend lines.

Some of the Canadian Companies you may recognize in this sector are Algonquin Power Income fund, Atco Ltd., Canadian Hydro Developers Inc., Canadian Utilities Limited, Emera Incorporated, Fortis Inc. and TransAlta Corporation. These are primarily power generation companies, which use gas, water and other sources to develop and distribute power. Since March 20th, Atco, Canadian Utilities, Emera, Energy Savings Income Fund, Epcor and TransAlta have driven up the Utilities sub indices.

Fundamentally, the P/E ratio is trading at 18.55 and the dividend yield is 3.96% vs. the TSX, which is 17.59, and dividend yield, which is 2.59%. The payout ratio is the dividend paid vs. cash flows. Pay attention to this ratio because it varies widely by company. For example, on the low end Atco’s payout ratio is only 20% and on the high end Epcor’s payout ratio is 208%. From a technical and fundamental standpoint it’s a good time to consider adding some power to your investments. Refer to Rob Carrick’s portfolio strategy article in this Saturday’s edition of The Globe and Mail entitled “Hot Water: How to drop some H2O into your portfolio”.