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.
Source: Getty Images
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.
