In relation to dividend shares, their reliability is of utmost significance. In spite of everything, we need to know the way a lot revenue to anticipate in order that we are able to plan accordingly. Irregular and unreliable revenue isn’t the kind of revenue we would like.
Fortunately, we’ve dividend champions that may present us with revenue that’s predictable, dependable, and rising. Fortis Inc. (TSX:FTS) is a chief instance of this. Let’s take a better look.
A 51-year dividend historical past
There’s nothing extra telling than Fortis’ dividend historical past. This historical past consists of 51 consecutive years of accelerating dividend funds, making Fortis a real Dividend King (corporations which have elevated dividends for 50 consecutive years). This has been made doable by the truth that Fortis’ enterprise is within the defensive utilities business, which is characterised by two most important engaging options – defensiveness and predictability.
Electrical energy is a necessity. Demand for it is not going to wane with financial cycles or troublesome occasions. We merely discover the cash to maintain it. This offers Fortis with regular and steady demand, which interprets right into a steady enterprise. Moreover, Fortis’ enterprise is a regulated one. This additionally contributes to creating Fortis’ enterprise a steady and predictable one. All very engaging options of a dividend inventory.
Within the final 20 years, Fortis’ annual dividend has elevated greater than 280% to $2.64 per share. This interprets right into a compound annual development charge (CAGR) of seven%. That’s a 7% improve in Fortis’ dividend yearly for the final 20 years.
Wanting forward, Fortis is forecasting a 4% to six% annual dividend development charge to the yr 2029.
Fortis’ newest outcomes
In 2024, Fortis’ outcomes got here in forward of expectations, as did its first quarter of 2025. In truth, Q1 adjusted earnings per share (EPS) got here in at $1.00 versus expectations that have been calling for EPS of $0.97. This was 7.5% greater than final yr and it was pushed primarily by charge base development throughout Fortis’ utilities.
Wanting forward, Fortis’ five-year capital spending plan of $26 billion will improve the corporate’s charge base from $39 billion in 2024 to $53 billion in 2029. Importantly, this capital funding plan is low-risk and simply achievable. In truth, practically all the spending is said to regulated development and solely 23% of it’s on main tasks.
These low-risk investments are associated to the resiliency of the community and development at Fortis Alberta. They’re additionally associated to the corporate’s long-range transmission plan, which goals to make sure its transmission system is dependable, financial, and compliant for the subsequent 20 years.
Fortis inventory: A dependable dividend payer
Fortis’ steady and low-risk operations should not solely mirrored in its dividend historical past. They’re additionally mirrored in Fortis’ inventory worth efficiency over the long run. As you’ll be able to see from the worth graph beneath, the inventory has been a gentle performer – up 140% within the final 20 years.
This, coupled with the corporate’s constant and rising dividend funds, has made for a very engaging whole return profile.
I anticipate this to proceed sooner or later as Fortis continues to learn from inhabitants development, system enhancements, and elevated demand from the likes of knowledge centres and the electrification pattern.
