Fortis Inc. (TSX:FTS) is a leading North American regulated utility with nine regulated businesses, including the recent successful integration of UNS Energy in Arizona. Fortis serves three million gas and electric customers across North America.

Strategy

Fortis is on track this year for its capital spending of $2.2 billion. Further, the utility has a capital spending plan of about $8.8 billion from 2016 to 2020. It plans to focus on additional energy infrastructure in areas it services already and is looking to gain more exposure in renewable power.

Recently, Fortis finished the Waneta hydroelectric project in British Columbia. It was the biggest project that Fortis has ever done, yet it was able to deliver the project ahead of schedule and on budget.

Fortis is also interested in getting utility-scale solar power in Arizona. Generally, most of Fortis’s projects are small, which are lower risk than bigger projects.

Additionally, Fortis is well positioned to unlock value in its LNG business in British Columbia, whether it be expanding its gas pipelines or building LNG facilities. Fortis is also on the lookout for utility acquisitions that are accretive to its business.

Diversified assets

UNS Energy in Arizona and FortisBC in British Columbia are the biggest parts of Fortis’s business. UNS Energy is about 31% of the business, while FortisBC is about 30%.

Fortis would like to maintain that kind of diversity, with no jurisdiction making up more than 30% of its assets. The diversity of operations creates a low-risk profile for the business. No one regulatory decision or problem in any jurisdiction can materially impact the company.

Safe dividend and clear growth target

The recent quarterly dividend increase to 37.5 cents per share marks its 42nd year of dividend growth, an impressive record in Canada. In fact, Fortis is so confident about its business and growth in the next five years that it gave dividend-growth guidance.

Specifically, the 2016 payout will be $1.50 per share. Going forward from there, Fortis sees 6% dividend growth per year through 2020.

Focused business

In the past year Fortis sold its commercial real estate of $430 million and hotels of $365 million to become a pure regulated utility business. Fortis also took advantage of the strong market for small hydro plants by selling them for a nice gain. These sales further improved the liquidity of Fortis.

In conclusion

To deliver its capital spending plan, Fortis doesn’t anticipate issuance of common equity. So, there won’t be shareholder dilution. However, about 40% of shareholders reinvest their dividends, which generates about $150 million of common equity a year.

Fortis maintains a strong balance sheet and it has an S&P credit rating of A-. At below $38 a share, it pays a strong 4% dividend that’s expected to grow 6% from 2017 and onward.

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Fool contributor Kay Ng owns shares of FORTIS INC.