Fortis (TSX:FTS) has long been one of the top companies recommended to Canadian investors for stable income. This comes from a long history of stable returns coupled with dividend growth.
In fact, Fortis stock is just shy of achieving Dividend King status. This only belongs to companies that have increased their dividend each year for the last 50 consecutive years!
This has made Fortis stock a strong choice for investors. But what about over the last few decades? After a major recession in 2008 and current economic performance, is Fortis stock still one for the ages?
Looking at returns
As mentioned, during the last 17 years, there has been a lot going on for Fortis stock. So, if you had invested $2,500, what would returns have looked like during that time? In June 2006, shares traded at about $22.50. Fast forward to today, with shares at $56.84, and you would see returns of 153%!
That means, based on returns alone, your original $2,500 investment would be worth around $6,309 today. That’s incredible earnings in 17 years, with a compound annual growth rate (CAGR) of 5.57%.
Of course, during that time, there has certainly been some volatility. During the Great Recession, for example, shares of Fortis stock dropped by about 27% from peak to trough. More recently, the utilities selloff saw shares drop by 17%, with prices still working to those all-time highs.
Another point to consider: Dividends!
While the last 17 years haven’t exactly been completely smooth sailing, there has been another part of Fortis stock that has been a smooth ride. That’s the dividend income you would receive. If you invested $2,500 back in 2006, here is what you would have gained in passive income.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY |
| FTS | $22.50 | 111 | $0.64 | $71.04 | quarterly |
That’s a small amount, sure. But again, this stock is almost a Dividend King. In the last 17 years, the dividend has grown from $0.64 per year to $2.26! That’s a CAGR of 7.7%. So, while the amount of shares you have remains the same, your dividend income would climb, adding to your portfolio. By this year, you would have 111 shares creating $250.86 in annual passive income! Here’s what that could add up to over those 17 years.
| YEAR | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT |
| 1 | 111 | $0.64 | $71.04 |
| 2 | 111 | $0.69 | $76.59 |
| 3 | 111 | $0.74 | $82.14 |
| 4 | 111 | $0.80 | $88.80 |
| 5 | 111 | $0.86 | $95.46 |
| 6 | 111 | $0.93 | $103.23 |
| 7 | 111 | $1.00 | $111 |
| 8 | 111 | $1.08 | $119.88 |
| 9 | 111 | $1.16 | $128.76 |
| 10 | 111 | $1.25 | $138.75 |
| 11 | 111 | $1.34 | $148.74 |
| 12 | 111 | $1.45 | $160.95 |
| 13 | 111 | $1.56 | $173.16 |
| 14 | 111 | $1.68 | $186.48 |
| 15 | 111 | $1.81 | $200.91 |
| 16 | 111 | $1.95 | $216.45 |
| 17 | 111 | $2.10 | $233.10 |
| 18 | 111 | $2.26 | $250.86 |
By the moment you start investing until the end of 17 years (entering year 18), you’ll have gained more and more passive income. By the end of that period, you’ll have created a total of $2,515.26! On top of the $6,309, that’s a total of $8,824.26 from your original $2,500 investment. All from one stable investment in Dividend King Fortis stock
