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AltaGas leads selloff among Canadian power stocks in 2018

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AltaGas leads selloff among Canadian power stocks in 2018

Nearly all of the 18 power companies trading on the Toronto Stock Exchange and covered by S&P Global Market Intelligence recorded share price declines in 2018.

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By a large margin, AltaGas Ltd. recorded the biggest decline as its shares nosedived 51.4% year over year to close at C$13.90 on Dec. 31, 2018, with a market capitalization of C$3.74 billion.

AltaGas also led bottom-performing Canadian power stocks during the fourth quarter of 2018, with shares down 32.4% from the third quarter of 2018.

AltaGas shares plunged Oct. 30, 2018, after the company announced plans to shed about C$1.5 billion in additional assets to help pay down debt incurred in its WGL Holdings Inc. acquisition.

Co-CEO David Cornhill said the company is shifting strategy to bolster its financial position after a stock market rout in the wake of the roughly C$9 billion acquisition of WGL, which owns Washington Gas Light Co.

"We have never seen such lack of confidence in the company, which is evidenced by the stock that has significantly underperformed," Cornhill said on an Oct. 30, 2018, earnings conference call.

Year over year, Boralex Inc. saw a decrease of 28.3% to finish 2018 at C$16.84, with a market capitalization of C$1.5 billion; TransAlta Corp. shares dropped 25.0% to close at C$5.59, with a market capitalization of C$1.60 billion; and TransCanada Corp. shed 20.3% to close at C$48.75, with a market capitalization of C$44.53 billion.

Only Capital Power Corp. finished 2018 with gains, recording an 8.6% increase in share price to close at C$26.59, with a market capitalization of C$2.71 billion. The first two quarters of 2018 were profitable for Capital Power, which posted higher adjusted EBITDA.

Despite closing the year in the positive territory, the company saw a 6.7% quarter-over-quarter drop in share price during the fourth quarter of 2018. Capital Power expects an approximately 21% increase in its adjusted funds from operations for 2019.

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For the fourth quarter of 2018, Just Energy Group Inc. saw a 12.5% quarter-over-quarter increase to close at C$4.51, with a market capitalization of C$670 million. The company reported an 81% year-over-year increase in fiscal second-quarter 2019 base EBITDA.

Quarter over quarter, Emera Inc.'s stock price rose 8.8% to close at C$43.71, with a market capitalization of C$10.18 billion; Fortis Inc. saw an 8.7% increase to end at C$45.51, with a market capitalization of C$19.50 billion; and Hydro One Ltd. shares rose 3.1% to settle at C$20.25, with a market capitalization of C$12.07 billion.

Emera, Fortis and Hydro One all reported third-quarter 2018 earnings that beat Wall Street estimates. Fortis also increased its five-year capital expenditure program by C$2.8 billion to approximately C$17.3 billion.