Shopify (TSX:SHOP) is one of the most popular stocks in Canada. I believe that attention is rightfully earned. The company has done a very good job of establishing itself as a global leader in its industry. Not to mention, the e-commerce industry is one that’s poised to continue growing for years to come. As a result, Shopify stock has seen its value rise nearly 2,700% since its initial public offering in 2015.
Despite those outstanding returns, buying shares in Shopify stock may not be the best decision for all investors. For starters, this company has shown that it’s not immune to massive downturns. From November 2021 to October 2022, Shopify stock lost more than 80% of its value. If you don’t have the stomach for that, there’s a very good chance that you might’ve locked in some losses then.
With that in mind, I’ll discuss a stock that most Canadians should consider holding in their portfolios. This stock is a Dividend All-Star, which speaks to its quality. I think holding this stock could do you very well over the next decade or so.
Which stock would I buy over Shopify?
Fortis (TSX:FTS) is the stock that I’d buy over Shopify any day. For those who may be unfamiliar, Fortis is a massive company. It provides regulated gas and electric utilities to more than three million customers across Canada, the United States, and the Caribbean. As of September this year, Fortis operates a portfolio, which comprises about $66 billion of assets. Its total revenue in 2022 amounted to $11 billion. Clearly, this is a company that holds a leadership position within its industry.
What I find very appealing about Fortis is that utility companies tend to generate revenue on a recurring basis. That allows the company to operate under the assumption of a certain amount of revenue in any given quarter. That predictable source of revenue also allows Fortis to plan for dividend raises much ahead of time.
In fact, Fortis has done an excellent job of raising its dividend distribution over the past few decades. Its 50-year dividend-growth streak is the second longest of its kind in the country. Fortis has already announced its plans to continue raising its dividend through to 2028 at a rate of 4-6%. Although that growth rate may seem quite moderate, it does allow shareholders to stay ahead of inflation.
How has Fortis stock performed?
Over the past five years, Fortis stock has generated a return of about 21.5% before dividends are included. With a dividend which tends to yield about 3% to 4%, investors should be very happy with those kinds of numbers. Today, Fortis offers a bit of a higher dividend yield, which should be appealing to potential shareholders (4.20%). As the company continues to raise that dividend, your yield on cost will continue to get even more impressive.
There are many intriguing stocks that are available to Canadians. Companies like Shopify could be very appealing to new investors. However, it may not be the right one to hold in your portfolio. Fortis provides investors with a more stable stock and a reliable dividend. This is a stock I’d heavily consider buying before Shopify any day.