When the stock market takes a nosedive, investors start to sweat. It’s a natural reaction, especially when the numbers turn red and even reliable stocks seem shaky. But here’s the good news. Market sell-offs can also create some nice opportunities. And for anyone looking to protect their portfolio, Canadian dividend knights could be just the ticket to ride out the storm comfortably. These stocks have a history of consistently growing dividends year after year, offering investors reliable cash flow regardless of market ups and downs. Right now, two of Canada’s dividend knights look especially attractive.
Source: Getty Images
Fortis
First up is Fortis (TSX:FTS). Fortis is a utility company that provides electricity and natural gas across North America. People need power no matter what the market does, making Fortis’s business incredibly stable. It currently boasts a market cap of about $26 billion, making it one of Canada’s largest utility providers. Fortis managed to grow its dividend each year for nearly five decades. That’s pretty comforting when market volatility sends stocks swinging.
In the most recent earnings report, Fortis delivered solid numbers. For the quarter ending Dec. 31, 2024, it reported adjusted net earnings of $394 million, up from $370 million during the same quarter a year earlier. That shows steady growth even in challenging economic conditions. Fortis announced revenue for the quarter at $3.44 billion, beating analyst estimates slightly, proving once again its resilience.
Investors looking for consistent returns will appreciate the current dividend yield of around 4.4%. Plus, Fortis stated clearly it plans to keep boosting the dividend by roughly 4% to 6% annually through 2028. So, with reliable earnings, predictable dividends, and a defensive business model, Fortis checks all the boxes during tough market times.
Canadian Utilities
Another Canadian dividend knight worth a close look during turbulent markets is Canadian Utilities (TSX:CU). Like Fortis, Canadian Utilities operates primarily in the regulated utility sector, providing essential services such as electricity and natural gas. It also has a strong infrastructure segment, managing assets crucial to daily life. With a market capitalization of roughly $8 billion, Canadian Utilities has quietly built an enviable reputation among dividend investors. In fact, it currently holds the longest streak of dividend increases of any publicly traded Canadian company, with over 50 consecutive years and counting.
Canadian Utilities’s latest earnings report for the quarter ending Dec. 31, 2024, was reassuring. It generated adjusted earnings of $243 million, higher than the $217 million reported for the same quarter in 2023. Revenue came in at about $1.3 billion, slightly higher than analysts anticipated. That’s exactly the kind of reliable, no-drama financial performance that dividend investors love to see. Even in uncertain economic conditions, Canadian Utilities continues to provide stable and predictable earnings. The dividend knight offers investors a dividend yield of approximately 5.3%, a payout that’s secure and steadily growing.
Foolish takeaway
What’s comforting about both Fortis and Canadian Utilities is the simplicity. Both dividend knights operate essential services that customers can’t live without. Regardless of economic fluctuations or stock market anxiety, people keep paying their utility bills. This consistent cash flow gives both companies the financial strength to maintain and grow dividends. While other stocks may slash or pause dividends during downturns, Fortis and Canadian Utilities stand firm. The track records speak for themselves, proving they can reliably weather market turbulence.
Of course, dividend stocks aren’t immune to price drops during sell-offs. However, investors who prioritize dividends and steady income can be less worried about short-term price swings. By consistently reinvesting dividends, shareholders in these two companies steadily build wealth over time, no matter the market conditions. For nervous investors looking for stability, Canadian dividend knights like Fortis and Canadian Utilities provide peace of mind when markets wobble.
In short, market sell-offs can be scary, but they also remind us why dividend kings are valuable. Fortis and Canadian Utilities are well-managed businesses providing essential services, consistently profitable operations, and a long history of reliable dividends. These aren’t flashy investments promising quick riches, but they’re perfect for calm, confident investing. So, if you’re feeling uneasy about current market conditions, consider these two dividend knights. They might just help you sleep better at night, even as market storms rage around you.
