There’s one thing comforting about consistency. Whether or not it’s your morning espresso, your canine ready on the door, or a dividend inventory that delivers dependable dividend progress 12 months after 12 months, it’s the reliable issues that assist construct a way of economic safety. That’s the place Fortis (TSX:FTS) is available in.
Fortis isn’t flashy. It’s not chasing headlines with the most recent tech gimmick or speculating on unstable commodities. As a substitute, it delivers electrical energy and fuel to hundreds of thousands of shoppers throughout North America. It does so quietly, reliably, and with the type of long-term planning that makes it probably the greatest dividend performs of the previous decade. And for my cash, it may stay the perfect for the last decade forward, particularly for Canadian buyers searching for predictable, tax-efficient revenue.
Into earnings
Let’s begin with the numbers. Fortis reported first-quarter 2025 earnings of $499 million, or $1.00 per share. That’s up from $459 million and $0.93 per share a 12 months earlier. The expansion got here from a bigger charge base, beneficial forex trade, and the decision of Central Hudson’s charge software. Add in a strong capital program and also you’ve obtained a enterprise that’s not solely regular however nonetheless increasing.
That growth isn’t simply discuss. Fortis invested $1.4 billion in capital expenditures within the first quarter alone. It’s on monitor with an enormous $26 billion five-year capital plan, aiming to develop its midyear charge base from $39 billion in 2024 to $53 billion by 2029. That’s a 6.5% compound annual progress charge. The very best half? This type of regulated funding fuels earnings, which in flip fuels dividends.
That dividend
And right here’s the place Fortis actually shines. The corporate is focusing on 4% to six% annual dividend progress by way of 2029. In a world of yield traps and dividend cuts, that type of forecast backed by a predictable, regulated enterprise is a breath of recent air. Fortis has already raised its dividend for 51 consecutive years! You don’t get a streak like that by chance. And proper now, it yields 3.67%.
Utility shares usually get written off as boring, however boring is gorgeous when it comes with this sort of dividend dependability. The dividend inventory’s operations span 5 Canadian provinces, ten U.S. states, and three Caribbean international locations. That diversification helps it climate regional financial slowdowns or surprising regulatory modifications. So, even when markets wobble, Fortis tends to maintain the lights, and the dividends, on.
Concerns
After all, no funding is totally risk-free. Fortis does face some challenges, like greater financing prices and international trade swings. Its publicity to U.S. operations means forex is usually a headwind or a tailwind relying on timing. And whereas utilities are sometimes seen as protected, they’re not resistant to coverage modifications or price overruns on huge infrastructure initiatives. However Fortis appears to be managing these dangers properly.
On the sustainability entrance, Fortis has already minimize corporate-wide greenhouse fuel emissions by 34% since 2019, with targets of fifty% discount by 2030 and 75% by 2035. That offers it room to draw ESG-focused buyers with out sacrificing its core mission of reliability and affordability. The 2050 net-zero goal is bold, however Fortis isn’t overpromising or playing, it’s laying out achievable steps with infrastructure already underway.
Backside line
On the finish of the day, utility shares are likely to fly underneath the radar. However for long-term buyers who need to sleep soundly at night time whereas accumulating rising dividends, Fortis deserves consideration. It’s not only a good dividend inventory, it’s an distinctive one.
