When most investors think about building a million-dollar portfolio, they picture buying high-growth stocks or finding the next big tech winner. But could a safe, low-growth utility stock like Fortis (TSX:FTS) actually help you retire a millionaire?
Although stocks that provide rapid growth potential can certainly speed up wealth creation, the real key to building a million-dollar investment portfolio is through discipline and consistency.
Saving steadily, investing for the long haul, and letting compounding work its magic over decades will almost always beat trying to time the market or find the hottest stock of the moment.
That’s why Fortis is a stock that fits the bill perfectly. It’s never going to double in value in a year, and it won’t dominate headlines.
However, it offers something far more valuable to long-term investors: stability, predictability, and slow-but-steady growth that compounds over time. That makes it a perfect core portfolio holding.
Now you could, of course, complement safe and reliable stocks like Fortis with some higher-growth names to boost returns, but a high-quality long-term holding like Fortis can form the foundation of a portfolio that weathers any market environment.
Plus, over the long haul, those consistent dividends and steady capital gains can quietly build enormous wealth. And when you reinvest those dividends, the compounding effect only accelerates.
So, if you’re looking to build a million-dollar portfolio, here’s why Fortis is certainly one of the top stocks to buy and hold for the long term.
Fortis is a dominant utility and the perfect defensive growth stock
The first reason why Fortis is such a high-quality stock to buy and hold for the long haul is that it’s one of the largest regulated utilities in North America, with operations spanning Canada, the United States, and the Caribbean.
And since it provides electricity and natural gas to millions of customers, its business model is incredibly stable. For example, demand for power doesn’t fluctuate very much with economic cycles and regulated rates ensure predictable revenue.
That’s the beauty of a high-quality utility stock like Fortis, since it provides essential services that households and businesses can’t do without. Even in recessions, people still need access to heat and electricity. This makes utilities some of the most defensive investments on the market.
Furthermore, by operating in multiple jurisdictions, Fortis spreads out risk and ensures no single regulatory change or regional slowdown can significantly impact the entire business.
And going forward, Fortis has a clear growth strategy that extends well into the future as more electricity demand is needed, especially with the growth of renewable energy projects.
This combination of stability and steady expansion is exactly what makes Fortis a textbook example of a defensive growth stock and why it’s the perfect core portfolio stock if you’re looking to retire a millionaire.
A dividend growth track record you can count on
On top of its stability and long-term growth potential, one of the most significant reasons why Fortis is such a high-quality stock is its track record of consistency.
In fact, the company has increased its dividend annually for 50 consecutive years now. In addition, Fortis’s dividend continues to have even more growth potential going forward and currently yields 3.5%.
Plus, since the company is constantly investing in new or existing assets to continue growing the business, and since its future revenue and earnings are often predictable, Fortis can consistently return capital to investors while continuing to fund future growth.
In fact, over the last decade, its revenue has increased at a compound annual growth rate (CAGR) of 7.9%; meanwhile, its earnings per share (EPS) and dividend have increased at CAGRs of 6.1% and 6.4%, respectively, showing just how consistent it is.
And going forward, analysts expect Fortis stock to see its EPS increase another 6% this year. In addition, the dividend is estimated to increase by another 4% this year.
So, if you’re looking to build a well-diversified and reliable portfolio that can grow and compound your wealth significantly, there’s no question that Fortis is a stock you’ll want to own.
