Thursday, 21 September 2017

133. Individual performance: Just Energy

Yesterday, I went ahead and purchase the 40th position in my portfolio. Already for a while, my thoughts are going over renewable opportunities. Which company is is the best bet in a rapidly evolving market that plays the (probably) most important role in people’s lives today?

My wild statement of the importance of utilities and energy companies in today’s world is based on my own estimate. I’m not anticipating NASA programmes, rocket shields, or even offshore operations. Think of the amount of energy that is used on a daily basis by an average household.

Looking at a day out of my life: energy consumption starts at 00:00 AM with all sorts of appliances on standby: alarm clock, refrigerator combination, wifi (does anyone ever shut this off?) etc. With this point of view, it’s only logic to value the growing importance of utility companies. Hence:
Looking at the chart, there dividends are there and even better the share price is very reasonable.

The company profile according Marketwatch:

Just Energy Group, Inc. engages in the sale of natural gas and electricity to residential and commercial customers under long-term fixed-price, price-protected or variable-priced contracts and green energy products. It specializes in electricity, natural gas and solar and green energy. The company operates through three divisions: Consumer Division, Commercial Division and Residential Solar Division. The Consumer Division provides services to residential and small commercial customers. The Commercial Division provides services to mid-size commercial customers. The Residential Solar sells complementary energy management solutions to solar customers. Just Energy Group was founded by Rebecca MacDonald in July 1997 and is headquartered in Mississauga, Canada.

This is right on the nose with my earlier statement for average households and their needs for energy. Even though the current rating is that the stocks sell at for overweight rates, I believe there is more room for upward movement. Albeit not in the very near future. The current market capitalization of 1.01B USD gives some comfort and by adhering to my current strategy of not purchasing over 1000 EURO batches this surely adds value in a void in my portfolio. Quick comparison of Energy vs Utilities sectors after (possibly) purchasing of JE: 27,28% versus 2,20%.

Some relevant news on JE:

True blue tribune, september 20, 2017. One important quote here for me is: “Just Energy Group has a dividend payout ratio of 77.4% indicating that its dividend is currently covered by earnings, but may not be in the future if the company’s earnings decline. Equities analysts expect Just Energy Group to earn $0.30 per share next year, which means the company may not be able to cover its $0.41 annual dividend with an expected future payout ratio of 136.7%.
However, there might just be a silver lining here: recently there have been some brokers hinting on an inflating share price (sometimes even up to 10 USD versus the 5,5 USD of today).

Speculating, once again, but has just persuaded me.

As per September 20th, I’m the proud owner of 175 shares of NYSE:JE at 5.61 USD.

If you have a minute, don’t hesitate to fill me in on your thoughts / opinions. Some good (and free) advice is always welcome. If you feel like connecting and sharing: please hit the Google+ follow button or find/follow me on twitter!
Thanks for stopping by and have a great day!

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