Infrastructure has long been a steady option for investors seeking stability. Infrastructure makes up the essentials of our daily lives, from the water we drink to the power in our homes. That’s why no matter what the market does, infrastructure will remain stable.
Much of this is thanks to the way the $20.8-billion company is set up. It currently focuses mainly on energy production and mines for its assets. These are classified as “long-term” assets, providing long-term contracts. Furthermore, these assets purchased by the company have low maintenance capital costs, with high barriers to entry. Combined, this creates stable income and cash flow for investors.
While transmission accounts for 60 per cent of the company’s value, distribution takes up the other 40 per cent. The company is well supported with the province of Ontario holding about 47 per cent of its common equity stake. In the meantime, shares of Hydro One stock are up 82 per cent since coming on the market in 2015, and 14 per cent in the last year. In fact, it’s done quite well even during this downturn, providing some immediate protection for investors. Plus, there’s a dividend yield currently at 2.91 per cent.Article contentNow if you’ve been doing pretty much any reading about investing during a downturn, you’ll likely have seen that the banks tend to not do so great.
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