Fortis (TSX:FTS) has long been a strong stock that many investors continue to consider a staple in their portfolio. That’s especially since becoming the second Dividend King on the TSX today. That means the company has increased its dividend for 50 consecutive years!
Yet in the last three months things have been a bit up and down. While shares are up 8% in the last three months, they have come down a bit in the last month alone. So let’s look at whether Fortis stock is still a buy today, or one to wait on.
What happened
Shares of Fortis stock started to rise after the company released positive earnings results. The company reported net earnings of $394 million during the third quarter, up from $326 million the year before. Adjusted net earnings per common share also rose to $0.84 year-over-year. Fortis stock also released its capital plan for 2024 to 2028, representing 6.3% average annualized rate base growth to $25 billion for the company.
The increases demonstrated that the investment flows into FortisBC utilities were strong, with more earnings coming through January 2023 that should be quite positive. Further contributions included higher retail revenue in Arizona, plus a higher U.S. to Canadian dollar foreign exchange rate.
Fortis stock now expects to continue that growth in the near- and long-term future. Even amidst price volatility, supply-chain disruptions, and higher inflation and interest rates, Fortis stock doesn’t expect these to have a “material impact.” Its base rate should now hit $49.4 billion by 2028, with even more opportunities between now and then to expand.
Analysts weigh in
While earnings certainly beat out earnings estimates, analysts were still a bit wary, some even cutting their future share price projections. The company also included in its earnings announcement that it would be selling its Aitken Creek sale, with proceeds used towards future growth.
However, even with the company now able to execute its capital program, it simply seems as though growth may be on the lower end in the near term. That being said, analysts still believe that Fortis stock is a strong company to hold long term.
Fortis stock’s utility energy infrastructure remains on solid footing even as the world shifts away from oil and gas production. Its 4% to 6% dividend increase each year looks solid as well as a reachable target. Further, analysts believe investors should continue to find it a low-risk option that can add a strong core asset to any portfolio.
Bottom line
So while shares have been up and down lately, now could be a great time to get into Fortis stock! The company has grown steadily over time. Shares are up 1% in the last year, 8% in the last three months, and about 67% in the last decade alone!
Fortis stock then might look like a volatile stock in this market right now. Especially with sales contributing to investor unease. However, overall Fortis stock looks like a strong investment for those seeking a core asset for growth, as well as solid future dividends.
