Canadian Utilities Limited (CU.TO) stock analysis

In our weekly check, Canadian Utilities Limited is graded D (A to F). Of 25 checks on debt, profit, cash flow and trend: 13 pass, warnings: 3, red flags: 9.

About Canadian Utilities Limited

Canadian Utilities Limited is an Utilities company (Diversified Utilities) based in Canada, listed on TSX as CU.TO.

What our checks show for CU.TO

Red flags

• Net debt is 5.9x a year of EBITDA (debt/equity 1.85). That limits room in a downturn and raises refinancing risk.
• Operating profit covers interest only 1.1 times: a weak year could make the payments hard.
• The net margin fell by 7.9 points over 5 years, to 3.3%: the company keeps less of each sale as profit.
• The gross margin fell by 13.7 points, to 24.9%: costs are rising faster than prices.
• Revenue fell 2.4% a year over the last 3 years.
• The net margin is only 3.3%: little room if costs rise.
• The dividend takes 466% of profit: little cushion if profit falls.
• Recovering from its deepest fall took about 5.7 years.
• Return on capital (ROCE) is only 2.6%.

Warning signs

• Earnings per share fell 57.4% a year over the last 3 years.
• Net profit fell 41.9% a year over the last 3 years.
• The stock has fallen as much as 42% from a peak. Would you have held through that?

Strengths

• Operating cash flow is 12.86x net profit: the profit arrives as real cash.
• Analysts expect earnings per share to grow about 221% a year over the next years.
• Analysts expect the net margin to improve by 13.1 points from today's 3.3%.
• The price moves calmly: 17% annual volatility.
• Beta 0.56: the stock usually moves less than the market.
• Pay in shares is only 0% of free cash flow.

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Questions

What grade does Canadian Utilities Limited (CU.TO) have?

In our weekly check, Canadian Utilities Limited is graded D (A to F). Of 25 checks on debt, profit, cash flow and trend: 13 pass, warnings: 3, red flags: 9. The grade is a risk check, not a buy or sell recommendation.

What are the main risks of CU.TO stock?

This week's biggest flags for Canadian Utilities Limited: High debt, Weak interest cover, Margins falling. In total 12 of 25 checks show a warning or a red flag.

What does Canadian Utilities Limited do?

Canadian Utilities Limited is an Utilities company (Diversified Utilities) based in Canada, listed on TSX as CU.TO.

The grade is a risk check, not a price forecast, and not investment advice. In our 10-year test (S&P 500, 2016-2026), stocks we graded A or B fell more than 30% 2-3 times less often than D or F, without a lower average return.

Updated 2026-11-07

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