Wish to retire early with out worrying about market drama? Canadian Utilities (TSX:CU) is perhaps the quiet cornerstone you want in your portfolio. It’s not flashy, and it gained’t go viral. However should you’re attempting to find dependable revenue and long-term safety, this dividend inventory makes an extremely robust case.
Delivering revenue
Canadian Utilities has been doing one factor very effectively for a really very long time: paying dividends. In reality, it holds the file for the longest consecutive streak of dividend will increase in Canadian historical past, with 52 years and counting. That’s the sort of consistency revenue buyers dream of. Immediately, it yields about 4.8% yearly, with the dividend inventory declaring a quarterly dividend of $0.4577 per share. That sort of money circulation, particularly when reinvested over time, can snowball into one thing highly effective. In case you’re making an attempt to construct a retirement plan that doesn’t depend on guesswork, CU provides you one thing tangible to rely on.
Within the final 12 months, shares have additionally quietly risen practically 16%. This rise was pushed by a powerful second quarter the place adjusted earnings reached $121 million, up from $117 million the 12 months earlier than. Earnings per share (EPS) ticked as much as $0.45 from $0.43, displaying strong momentum. Canadian Utilities has been specializing in increasing its regulated utilities, particularly via ATCO Power Techniques and its Australian operations. In reality, 95% of its $382 million in capital expenditures final quarter went into these areas, which implies it’s doubling down on secure, long-term infrastructure.
Extra to return
The dividend inventory can also be engaged on large development tasks that might gasoline much more money circulation down the road. The $2.8 billion Yellowhead Pipeline Mission is on monitor for development in 2026, whereas its Central East Switch-Out electrical energy challenge is already underway. It’s anticipated to provide over 1,500 megawatts to Alberta’s grid by 2026. Each of those are the sort of regulated, contracted tasks that present reliable income for many years. These are foundational power tasks backed by provincial oversight and pushed by rising demand.
Pure gasoline storage additionally performs a rising function in CU’s future. EnPower, its power options arm, noticed revenues climb to $169 million within the first half of 2025, up from $160 million in the identical interval final 12 months. As power markets grow to be extra unstable and demand for storage rises, this phase may provide each development and stability, a uncommon combo in right this moment’s financial system.
Issues
After all, no inventory is with out threat. CU does carry a heavy debt load, with debt-to-equity above 150%. That’s typical for utilities, but it surely means the dividend inventory is delicate to modifications in rates of interest. Fortuitously, with money circulation from regulated property and a powerful credit score historical past, CU has been capable of handle its financing successfully. The dividend inventory’s payout ratio additionally appears excessive on paper, however that’s commonplace on this sector the place depreciation distorts web revenue. What issues extra is whether or not money circulation covers the dividend, and it does.
So, what does this imply on your retirement plan? Effectively, think about investing $7,000 in CU right this moment. At a 4.8% yield, that generates $331 in annual revenue. Reinvest that for a decade and also you’re constructing a rising revenue stream, particularly if dividend will increase proceed and also you proceed to take a position 12 months after 12 months. That is the sort of technique that doesn’t depend on promoting shares or making an attempt to time the market. It’s about amassing regular paycheques when you sleep.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| CU | $38.49 | 181 | $1.83 | $331.23 | Quarterly | $6,963.69 |
Backside line
Canadian Utilities isn’t going to make headlines. But when your objective is to create a portfolio that funds an early retirement, one the place you’re not checking your telephone each time the market hiccoughs, this dividend inventory deserves severe consideration. It’s secure, it’s rising, and it has paid dividends via inflation, recessions, and all the things in between. Typically, essentially the most boring inventory in your portfolio finally ends up being essentially the most helpful.
