Will Ares Capital (USA Stocks:ARCC) and Fortis (USA Stocks:FTS) deliver in March?

FTS Stock

USD 42.54 0.75 1.79%

Macroaxis Story

It looks like Ares Capital will be up for a correction faster as its share price went up 0.65% today to Fortis's 0.97%. As many rational traders are trying to avoid electric utilities space, it makes sense to review Fortis Inc a little further and understand how it stands against Ares Capital and other similar entities. We are going to break down some of the competitive aspects of both Fortis and Ares Capital.

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Reviewed by Michael Smolkin

By analyzing existing basic indicators between Fortis and Ares Capital, you can compare the effects of market volatilities on both companies' prices and check if they can diversify away market risk if combined in one of your portfolios. You can also utilize pair trading strategies for matching a long position in Ares Capital with a short position in Fortis. Check out our pair correlation module for more information.

Let's begin by analyzing the assets.

The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Fortis has an asset utilization ratio of 16.39 percent. This implies that the company is making $0.16 for each dollar of assets. An increasing asset utilization means that Fortis Inc is more efficient with each dollar of assets it utilizes for everyday operations.

Will Ares Capital (USA Stocks:ARCC) and Fortis (USA Stocks:FTS) deliver in March?

Out of tens of thousands of stocks, funds, and ETFs that trade on global exchanges each represent an individual company which you can analyze using comparative analysis. To determine which one of the two entities, such as Fortis or Dupont is a better fit for your portfolio, analyzing a few basic fundamental indicators is a good first step.

Understending Fortis dividends

A dividend is the distribution of a portion of Fortis earnings, decided and managed by the company's board of directors and paid to a class of its shareholders. Note, announcements of dividend payouts are generally accompanied by a proportional increase or decrease in a company's stock price. Fortis dividend payments follow a chronological order of events, and the associated dates are important to determine the shareholders who qualify for receiving the dividend payment. Fortis one year expected dividend income is about USD1.1 per share.

Preferred Dividends Income Statement Impact is likely to drop to about 62.2 M in 2023. Dividend Yield is likely to drop to 0.041 in 2023.

	Last Reported	Projected for 2023
Preferred Dividends Income Statement Impact	64 M	62.2 M
Dividend Yield	0.042	0.041
Dividends per Basic Common Share	1.68	1.63

Investing in dividend-paying stocks, such as Fortis Inc is one of the few strategies that are good for long-term investment. Ex-dividend dates are significant because investors in Fortis must own a stock before its ex-dividend date to receive its next dividend.

This type of analysis is very useful when you want to generate a past dividend schedule and payout information for Fortis. Then that information in the form of graph and calendar can be used to fully explain how Du Pont dividends can provide a real clue to its valuation.

How important is Fortis's Liquidity

Fortis financial leverage refers to using borrowed capital as a funding source to finance Fortis Inc ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Fortis financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Fortis's total debt and its cash.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions.

It is good to see analyst projects for Fortis, but it might be worth checking our own buy vs. sell analysis

Correlation Between Fortis and Dupont De Nemours

In general, Stock analysis is a method for investors and traders to make individual buying and selling decisions. Stock correlation analysis is also essential because it can help investors realize that they may not be as diversified as they think. Risk management strategies are usually required to make sure all portfolios are properly aligned against their risk tolerance level. You can consider holding Fortis together with similar or unrelated positions with a negative correlation. For example, you can also add Dupont De to your portfolio. If Dupont De is not perfectly correlated to Fortis it will diversify some of the market risks out of the positively correlated stocks in your portfolio. However, the disadvantage of this sort of hedging is that it can potentially affect your investment returns throughout market cycles. When Fortis, for example, performs excellent and delivers stable returns, the negatively correlated position you locked in as a hedge may drag your returns down.

Please check pair correlation details between FTS and DD for more information.

Note

Are you currently holding both Fortis and Dupont De in your portfolio?

Please note if you are using this as a pair-trade strategy between Fortis and Dupont De, watch out for correlation discrepancy over time. Relying on the historical price correlations and assuming that it will not change may lead to short-term losses.

Detailed Perspective On Fortis

Revenue is income that a firm generates from business activities such us rendering services or selling goods to customers. It is a crucial part of a business and an essential item when evaluating a company's financial statements. Revenues from a firm's primary business operations can be reported on the income statement as sales revenue, net sales, or simply sales, depending on the industry in which a given company operates.
Revenue is typically recorded when cash or cash equivalents are exchanged for services or goods and can include product or services discounts, promotions, as well as early payments on invoices or services rendered in advance.

Revenue Breakdown

Lets now take a look at Fortis revenue. Based on the latest financial disclosure, Fortis Inc reported 9.45 B of revenue. This is 138.57% higher than that of the Electric Utilities sector and significantly higher than that of the Utilities industry. This indicator is about the same for all United States stocks average (which is currently at 9.43485149892E9). As for Ares Capital we see revenue of 237 M, which is much higher than that of the Utilities

FTS

9.4 B

FTS	9.45 Billion	97.55
Sector	0.0	0.0
ARCC	237 Million	2.45

Fortis is likely finish below USD41 in 30 days

Newest Sortino Ratio is up to -0.03. Price may drop again. Fortis Inc has relatively low volatility with skewness of 0.53 and kurtosis of 0.93. However, we advise all investors to independently investigate Fortis Inc to ensure all accessible information is consistent with the expectations about its upside potential and future expected returns. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Fortis' stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Fortis' stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

The Current Takeaway on Fortis Investment

When is the right time to buy or sell Fortis Inc? Buying stocks such as Fortis isn't very hard. However, what challenging for most investors is doing it at the right time. Proper market timing is something most people cannot do without sophisticated tools, which help to isolate the right opportunities, deliver winning trades and diversify portfolios on a daily basis.

On the whole, as of the 10th of February 2023, we believe that Fortis is currently undervalued with below average odds of financial turmoil in the next two years. Our primary 90 days buy-sell recommendation on the firm is Buy.

Editorial Staff

Ellen Johnson is a Member of Macroaxis Editorial Board. Ellen covers public companies in North America, focusing primarily on valuation and volatility. Six years of experience in predictive investment analytics and risk management. View Profile

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Ellen Johnson do not own shares of Fortis Inc. Please refer to our Terms of Use for any information regarding our disclosure principles.

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