In a time when more Canadians are cutting back on spending just to keep up with rising mortgage payments, the idea of dependable, passive income is more appealing than ever. With interest rates still far from their historic lows, it makes sense that investors are turning to steady dividend-paying stocks for financial stability. One name that consistently stands out is Hydro One (TSX: H), a dependable Canadian utility that offers a reliable stream of income. So, if you’re aiming to earn $2,000 per year in dividends, let’s look at how many shares of Hydro One you would need to make that happen.
Source: Getty Images
Making that cash
Hydro One is Ontario’s largest electricity transmission and distribution company. Because of its regulated business model and the essential nature of electricity, the dividend stock enjoys stable cash flow even when other parts of the economy slow down. It’s not the kind of stock that grabs headlines, but it’s the kind of stock that quietly pays you while you sleep.
As of writing, Hydro One pays a quarterly dividend that comes out to $1.33 per year. At the current share price of around $48.90, it would require an investment of approximately $73,500 to create $2,000 in annual dividend income. While that may sound like a big number, many investors build up to that amount over time through consistent contributions and dividend reinvestment.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND (annual) | TOTAL PAYOUT | FREQUENCY | INVESTMENT TOTAL |
|---|---|---|---|---|---|---|
| H | $48.90 | 1,503 | $1.33 | $1,999 | Quarterly | $73,496.70 |
Is it worth it?
Hydro One reported its most recent earnings in early May. For the first quarter of 2025, it posted revenue of $2.41 billion and net income of $359 million, or $0.60 per share. Both top and bottom lines came in stronger than expected, reinforcing its reputation for operational stability. The dividend stock continues to invest in improving grid reliability and modernizing infrastructure, which is important as Ontario’s electricity demand rises.
What’s especially attractive about Hydro One is not just the dividend itself, but the consistency of dividend growth. Over the past three years, the dividend increased at a compound annual growth rate of about 7%. Even this year, the dividend stock raised its dividend by over 6%. That’s not just a one-time bump. Hydro One has a track record of boosting its payout regularly, which helps your income grow even if you never buy another share.
Another reason investors favour Hydro One is its manageable payout ratio. It distributes around 60% to 70% of its net income as dividends, leaving room to reinvest in the business or strengthen its balance sheet. In today’s market, that balance is critical. Companies with too-high payout ratios can find themselves stretched if earnings fall. Hydro One, however, has consistently kept its financial house in order.
Considerations
Of course, no dividend stock is completely risk-free. Hydro One operates under provincial regulation, and any changes in electricity pricing policies or political priorities could impact earnings. There’s also the ongoing cost of infrastructure development and interest payments on debt. But the dividend stock has been careful with its expansion strategy, acquiring assets like the East-West Tie Transmission Project in ways that fit well with its long-term vision.
For those trying to build up a dividend portfolio that delivers predictable income, Hydro One deserves serious consideration. While the yield of around 2.71% isn’t the highest on the market, it’s backed by a strong business with a stable customer base and long-term contracts. It may not be flashy, but it’s the kind of dividend stock you can tuck away and rely on.
Bottom line
To sum it up, you’d need about 1,503 shares of Hydro One to bring in $2,000 in dividends each year. At current prices, that’s about $73,500 in total investment. It’s a long-term play, but it offers something many stocks can’t: peace of mind. In a time when Canadians are being forced to think more carefully about their finances, owning a stable utility like Hydro One might just be the kind of quiet win your portfolio needs.
