When it comes to safe, reliable investments, the utilities sector is hard to beat. Whether the economy booms or faces headwinds in 2025 and beyond, Canadian utility stocks could deliver steady performance and largely predictable income.
In this article, I’ll introduce you to three of the best utility stocks on the TSX, focusing on their financial growth trends, dividend sustainability, and potential for long-term growth.
Canadian Utilities stock
Canadian Utilities (TSX:CU) is the first reliable utility stock you can consider right now. This Calgary-headquartered company has a diversified energy infrastructure that delivers essential services through electricity and natural gas transmission and distribution.
CU stock currently trades at $34.09 per share, with a market cap of $7 billion and an attractive annualized dividend yield of 5.4%, making it a steady income source for investors.
In its most recent quarter ended in September 2024, CU’s revenue saw a slight dip. Nevertheless, the company reported a solid 17.2% YoY (year-over-year) increase in its adjusted quarterly net profit to $102 million, reflecting its strong financial performance despite macroeconomic concerns.
Moreover, CU’s long-term initiatives, like the Yellowhead Mainline project and advancements in hydrogen production, have the potential to improve its financial growth in the coming years. These efforts, combined with consistent dividends, position it as a solid choice for long-term investors.
Fortis stock
After rallying by nearly 17% over the last year, Fortis (TSX:FTS) could be another top utility stock to consider in Canada right now. This top North American utility firm has assets worth $70 billion and provides regulated electric and gas services.
Currently trading at $62.32 per share, Fortis stock has a market cap of $31.2 billion and offers a quarterly dividend with an attractive annualized yield of around 3.9%.
Fortis registered a 6.6% YoY rise in its net profit last quarter to $420 million with the help of rate base growth and strong performance in Arizona. The company’s $26 billion capital plan for 2025-2029 clearly highlights long-term growth plans as it targets a 6.5% average annual rate base increase.
Interestingly, nearly 77% of its new capital plan is allocated to low-risk regulated investments with largely predictable returns. In addition, Fortis’s growing focus on cleaner energy and grid resiliency makes it a dependable choice for investors seeking long-term stability.
Capital Power stock
The third stock in my list of top utility stocks for Canadian investors is Capital Power (TSX:CPX), a growth-oriented utility company based in Edmonton. It mainly focuses on acquiring and managing renewable and thermal power facilities. It currently has roughly 10 gigawatts of power-generation capacity across its 30 facilities.
After jumping by nearly 37% over the last year, CPX stock currently trades at $50.69 per share with a market cap of $7 billion. It also offers a 5.1% annualized dividend yield at this market price.
In the third quarter of 2024, Capital Power’s electricity generation jumped 29% YoY to a record level of 11 terawatt hours due mainly to strong performance from its U.S. assets amid high demand. This helped the company’s adjusted funds from operations rise 6.4% from a year ago to $315 million.
Overall, Capital Power’s investments in projects like the Genesee Repowering and York Battery Energy Storage Systems are expected to improve its long-term growth potential, making it an attractive utility stock to buy now.
