It can be a bit unsettling when interest rates freeze in a shaky market. That’s when many investors start looking for solid, dependable stocks that pay dividends. These can offer a nice, regular income stream. One such Canadian stock is Fortis (TSX:FTS). It’s a utility company known for its steady earnings and regular dividend payments. If your goal is to earn $500 a month in dividends, Fortis stock might be a good one to consider. Let’s look at why.
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How much to buy
As of writing, Fortis stock trades around $66.50. The company pays out a dividend every quarter, and that amount is currently $2.46 per share annually. Based on the current stock price, this gives Fortis a forward dividend yield of about 3.72%. So, how many shares would you need to own to get $500 a month? Well, $500 per month works out to $6,000 per year. So let’s see how that adds up.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
| FTS | $66.50 | 2,439 | $2.46 | $5,999.94 | quarterly | $162,193.50 |
At the current share price of $66.50, this would mean an investment of around $162,193. It’s a fair chunk of change, showing what it might take to generate that level of income from this particular stock.
What to consider
One thing that really stands out about Fortis stock is its incredible track record of dividend growth. It has increased its dividend for a whopping 50 years in a row! That’s a long time of consistently rewarding shareholders with more income each year. This kind of consistency really highlights the company’s commitment to returning value to the people who own its stock. It suggests a stable and reliable business.
Looking at how Fortis did financially in 2023, the company reported net earnings of $1.5 billion, or $3.10 per share. That’s an increase from the $1.3 billion, or $2.78 per share, it earned in 2022. This growth in earnings was mainly driven by increases in their rate base across various utility operations. Also, new cost of capital rules approved for FortisBC helped boost earnings. These positive financial results help support those consistent dividend payments.
In 2023, Fortis stock invested $4.3 billion in capital projects. These investments were focused on making systems more resilient and modernizing their grids. This included spending over $700 million on cleaner energy projects. These kinds of investments are important for Fortis’s long-term growth plans and also show commitment to finding more sustainable energy solutions. By investing in infrastructure and cleaner energy, Fortis stock positions itself for the future.
Foolish takeaway
Fortis stock is scheduled to release its next earnings report on May 7, 2025. Investors will be paying close attention to this report to see how the company is performing and to get any updates on its plans for future capital investments. Earnings reports give a good snapshot of the company’s current financial health and future prospects.
For those investors who are looking for a stable and dependable income stream, Fortis stock definitely offers a reliable option to consider. However, it’s always a smart move to think about your own individual financial goals, how comfortable you are with different levels of risk, and maybe even chat with a financial advisor before you make any investment decisions. They can help you figure out if a stock like Fortis fits into your overall financial plan. The bottom line is that even a stable stock like Fortis stock can experience volatility. Therefore, it’s likely best to diversify your investments rather than place a significant $162,000 investment into one stock.
