For My Money, This Canadian Utility Stock Is, Hands Down, the Best Dividend Play of the Decade

This utility stock may not be flashy but it is one of the best dividend plays of the past decade and could remain the best for the decade ahead.

| More on:
Concept of multiple streams of income

Source: Getty Images

There’s something comforting about consistency. Whether it’s your morning coffee, your dog waiting at the door, or a dividend stock that delivers reliable dividend growth year after year, it’s the dependable things that help build a sense of financial security. That’s where Fortis (TSX:FTS) comes in.

Fortis isn’t flashy. It’s not chasing headlines with the latest tech gimmick or speculating on volatile commodities. Instead, it delivers electricity and gas to millions of customers across North America. It does so quietly, reliably, and with the kind of long-term planning that makes it one of the best dividend plays of the past decade. And for my money, it could remain the best for the decade ahead, especially for Canadian investors seeking predictable, tax-efficient income.

Into earnings

Let’s start with the numbers. Fortis reported first-quarter 2025 earnings of $499 million, or $1.00 per share. That’s up from $459 million and $0.93 per share a year earlier. The growth came from a larger rate base, favourable currency exchange, and the resolution of Central Hudson’s rate application. Add in a solid capital program and you’ve got a business that’s not only steady but still expanding.

That expansion isn’t just talk. Fortis invested $1.4 billion in capital expenditures in the first quarter alone. It’s on track with a massive $26 billion five-year capital plan, aiming to grow its midyear rate base from $39 billion in 2024 to $53 billion by 2029. That’s a 6.5% compound annual growth rate. The best part? This kind of regulated investment fuels earnings, which in turn fuels dividends.

That dividend

And here’s where Fortis really shines. The company is targeting 4% to 6% annual dividend growth through 2029. In a world of yield traps and dividend cuts, that kind of forecast backed by a predictable, regulated business is a breath of fresh air. Fortis has already raised its dividend for 51 consecutive years! You don’t get a streak like that by accident. And right now, it yields 3.67%.

Utility stocks often get written off as boring, but boring is beautiful when it comes with this kind of dividend dependability. The dividend stock’s operations span five Canadian provinces, ten U.S. states, and three Caribbean countries. That diversification helps it weather regional economic slowdowns or unexpected regulatory changes. So, even when markets wobble, Fortis tends to keep the lights, and the dividends, on.

Considerations

Of course, no investment is completely risk-free. Fortis does face some challenges, like higher financing costs and foreign exchange swings. Its exposure to U.S. operations means currency can be a headwind or a tailwind depending on timing. And while utilities are often seen as safe, they’re not immune to policy changes or cost overruns on big infrastructure projects. But Fortis seems to be managing those risks well.

On the sustainability front, Fortis has already cut corporate-wide greenhouse gas emissions by 34% since 2019, with targets of 50% reduction by 2030 and 75% by 2035. That gives it room to attract ESG-focused investors without sacrificing its core mission of reliability and affordability. The 2050 net-zero target is ambitious, but Fortis isn’t overpromising or gambling, it’s laying out achievable steps with infrastructure already underway.

Bottom line

At the end of the day, utility stocks tend to fly under the radar. But for long-term investors who want to sleep soundly at night while collecting growing dividends, Fortis deserves attention. It’s not just a good dividend stock, it’s an exceptional one.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Fortis. The Motley Fool has a disclosure policy.

More on Energy Stocks

A worker overlooks an oil refinery plant.
Energy Stocks

Canadian Energy Stocks Took a Big Hit to Start 2026: Should Investors Worry?

iShares S&P/TSX Capped Energy Index ETF (TSX:XEG) and Canadian crude have taken a hit to start the year, but it…

Read more »

A person builds a rock tower on a beach.
Energy Stocks

2 Rock-Solid Canadian Dividend Stocks for Steady Passive Income

These high-quality dividend stocks are capable of maintaining current payouts while increasing distributions across market cycles.

Read more »

diversification and asset allocation are crucial investing concepts
Energy Stocks

The Canadian Energy Stock I’m Buying Now: It’s a Steal

Find out how geopolitical tensions are shaping Canadian oil stocks and commodity prices amidst the crisis in Venezuela.

Read more »

canadian energy oil
Energy Stocks

Energy Loves a New Year: 2 TSX Dividend Stocks That Could Shine in January 2026

Cenovus and Whitecap can make January feel like “payday season,” but they only stay comforting if oil-driven cash flow keeps…

Read more »

how to save money
Energy Stocks

Cenovus Energy: Should You Buy the Pullback?

Cenovus is down more than 10% in recent weeks. Is the stock now oversold?

Read more »

oil pump jack under night sky
Energy Stocks

Suncor Energy: Should You Buy the Dip?

Suncor Energy (TSX:SU) saw its share price drop on concerns that Canadian oil sands producers are at risk of losing…

Read more »

Trans Alaska Pipeline with Autumn Colors
Energy Stocks

If Growth Is Your Game, We Have the Name of the Dividend Stock for You

Enbridge (TSX:ENB) might be a great buy for one's TFSA in the new year.

Read more »

Dam of hydroelectric power plant in Canadian Rockies
Energy Stocks

2 Stocks Worth Buying and Holding in a TFSA Right Now

Given their regulated business model, visible growth trajectory, and reliable income stream, these two Canadian stocks are ideal for your…

Read more »