A dividend all-star is a Canadian equity that has achieved dividend growth for at least five consecutive years. Contrast this with a Dividend King, which has managed to deliver at least 50 straight years of annual dividend increases. Today, I want to look at a top Canadian dividend all-star that I’d much rather own over Shopify (TSX:SHOP) stock in April 2023 and certainly for the long term. Let’s dive in!
Image source: Getty Images
This dividend all-star has been on fire in 2023!
Hydro One (TSX:H) is a Toronto-based company that operates as an electricity transmission and distribution company in Ontario. Indeed, it boasts a monopoly in Canada’s largest province by total population. This dividend all-star stock has been a dependable hold since it was publicly listed back in November 2015.
Shares of Hydro One have climbed 10% month over month as of close on Wednesday, April 5. That has pushed this dividend all-star stock into the black in the year-to-date period. Its shares are now up 11% year over year. Investors who want to see more of its recent performance can play with the interactive price chart that is included below.
Why you can trust Hydro One to deliver for the long haul!
Canadian utility stocks have a reputation for being dependable. Indeed, Fortis and Emera also qualify as dividend all-stars. Fortis is on track to become a Dividend King by the middle of this decade. However, Hydro One deserves to be in a special category because of its enviable status in the country’s largest provincial market.
This company released its fourth-quarter (Q4) and full-year fiscal 2022 earnings on February 14, 2023. In Q4 2022, Hydro One reported basic earnings per share (EPS) of $0.30 — up 11% from basic EPS of $0.27 the company achieved in Q4 2021. The company benefited from approved rates from its transmission and distribution segments. Moreover, the recognition of Conservation and Demand Management (CDM) and other regulatory adjustments bolstered Hydro One’s Q4 results.
For the full year, Hydro One reported total revenues of $7.78 billion — up from $7.22 billion in the previous year. Meanwhile, net income rose to $1.05 billion compared to $965 million in fiscal 2022. Moreover, net cash from operating activities climbed to $2.26 billion over $2.14 billion for the prior full year. Hydro One received a boost due to many of the factors listed above and due to higher average monthly peak demand and energy consumption.
Here’s why I’m still looking to stack shares of this dividend all-star stock today
Hydro One has achieved seven consecutive years of dividend growth. That means this top utility qualifies as a dividend all-star stock on the TSX. This dividend all-star stock currently offers a quarterly distribution of $0.28 per share. That represents a 2.8% yield. Hydro One may not be a heavy hitter in the yield department, but it makes up for that with its consistency and capital growth potential.
Shares of Hydro One are trading near its 52-week high as of close on April 5. However, it still boasts a very solid price-to-earnings ratio of 22. Hydro One has been the picture of consistency since its price bottomed out in the summer of 2018. This is a dividend all-star stock you can trust for years to come.
