Incorporated in 1927, Canadian Utilities (TSX:CU) and its subsidiaries are involved in the generation and distribution of electricity, natural gas, and other retail energy. This company’s business branches to major countries like Canada, the U.S., and Australia.
Canadian Utilities is a popular name among Canadian blue-chip stocks due to its proven capability of providing consistent passive income.
If you are planning a long-term investment, take a look at analysts’ expectations from CU for upcoming years.
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Strong track record of dividend increases
Canadian Utilities is the first company in the Canadian stock market to receive the title of Dividend King owing to its excellent track record of dividend increase for 51 consecutive years.
This resource giant has an impressive quarterly dividend yield of 5.7% per year. This strong dividend yield is driven by impressive earnings per share growth of 46% over the past three years. While the company’s pace of growth is expected to slow in the coming years, this is a stock with a solid fundamental base worth considering.
Notably, Canadian Utilities is planning on executing a US$4 billion capital spending plan to boost growth over the next two years. This catalyst could drive further top- and bottom-line outperformance, making CU stock one to consider right now.
Dependable long-term revenue streams
With the commencement of the third quarter of 2024, Canadian Utilities announced a partnership with Chiniki and Goodstoney First Nations for Deerfoot and Barlow Solar Power Projects. This company has also signed a virtual power-purchase agreement with Lafarge for 12.5 years.
As discussed earlier, Canadian Utilities is among investors’ favourite blue-chip stocks owing to its track record for consistent and increasing dividend yield. A primary reason for the company’s regular dividend generation lies in its business patterns. Canadian Utilities’s business relies on long-term and regulated contracts. This helps the company receive stable revenue for a very long period of time.
For those looking for cash flow stability, Canadian Utilities remains a unique pick worthy of consideration. Outside of its relatively high yield, the company provides durable cash flow streams with strong long-term visibility on this front.
Bottom line
Since Canadian Utilities relies on long-term contracts that bring in regular revenue, the company provides stable returns in both bull and bear markets. Trading under $32 per share, this is a stock I think dividend investors want to consider at current levels. With the company’s long-term growth prospects, there could be some capital appreciation as well.
