For investors seeking the right mix of dividend income and growth, utilities stocks can be a great option to consider in 2025. Many of the top Canadian utilities players have seen their stock prices increase in recent years, as investors look for ways to play the rise of artificial intelligence (via the surging energy demand that’s likely to follow). However, despite these increases, plenty of analysts and experts believe that this could just be the start of a longer-term rally in this space.
For those who believe that the underlying tailwinds for the utilities sector are here to stay, here are three top Canadian stocks I think are worth looking at in 2025.
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Hydro One
Hydro One Limited (TSX: H) is one of Canada’s largest electricity transmission and distribution companies. Operating almost exclusively in Ontario, the company serves approximately 1.5 million customers. With a heavily regulated business, Hydro One’s business model provides investors with exposure to stable cash flows and income streams, which the company continues to pass onto investors in the form of dividends.
Currently yielding 2.8%, Hydro One’s near-monopoly position in the Ontario power market has allowed this company to benefit from one of the more robust multiples in this space.
Yes, 23 times earnings is relatively expensive for a utilities stock, even after the run-up companies like Hydro One have seen over the past year. But I do think investors will likely continue to pay up for quality. And in this sector, there are few higher-quality options to consider in a large (and growing) market like Ontario.
With a long history of dividend growth, Hydro One looks well-positioned to deliver stability and moderate growth as electricity demand increases with population growth and electrification trends.
Fortis
Fortis (TSX: FTS) is a powerhouse in the utility sector boasting over 3.4 million customers across Canada, the United States, and the Caribbean. With over $29 billion in market capitalization, Fortis operates a diverse portfolio of regulated electric and gas utilities.
Fortis is a Dividend Aristocrat, having increased its dividend for 50 consecutive years. Its current yield of approximately 4% makes it a top choice for income-seeking investors. In addition, Fortis has outlined a $25 billion capital investment plan through 2028, focusing on grid modernization and renewable energy. These investments are expected to drive rate base growth of 6% annually, translating into steady earnings and dividend increases.
Fortis also has a reputation for weathering economic downturns due to its regulated operations and geographically diversified portfolio. The company remains a compelling choice for the long haul for those seeking a reliable investment that combines growth and income.
Brookfield Renewable Corporation
Brookfield Renewable Corporation (TSX: BEPC) stands out as a major player in the global push toward renewable energy. The company is at the forefront of the energy transition with a portfolio that includes hydroelectric, wind, solar, and energy storage assets.
Its parent company, Brookfield Asset Management, provides deep expertise and financial backing, enabling it to scale operations worldwide. In addition, the company has over 25 gigawatts of capacity in operation and a development pipeline exceeding 110 gigawatts. With governments worldwide incentivizing renewable energy projects, BEPC is primed for explosive growth.
Moreover, the increasing focus on ESG factors makes BEPC attractive for investors looking to align with sustainable practices. Currently, BEPC stock provides investors with a dividend yield of approximately 4.5%. Coupled with strong prospects for dividend growth as renewable energy adoption accelerates, this is a utilities stock I think long-term investors may certainly want to consider in 2025.
