When markets tumble and headlines scream panic, it’s easy to second-guess your portfolio. But there’s one Canadian dividend knight you can count on to hold the line through any crash. Fortis (TSX:FTS) is the kind of dividend stock that doesn’t make waves on exciting days, but it shines when everything else is sinking.
About Fortis
At around $70 per share, Fortis has quietly gained over 17% in the past year. That alone is impressive in a high-rate environment where defensive stocks haven’t exactly been investor favourites. What’s more telling is the company’s ability to deliver consistent results no matter what’s going on in the world.
That’s the magic of being a regulated utility. Fortis provides electricity and gas to over three million customers across Canada, the U.S., and the Caribbean. It operates in 17 jurisdictions, and nearly all of its earnings come from regulated operations. This means predictable cash flow even when the economy sputters.
Into earnings
In the most recent quarter, Fortis posted net earnings of $384 million or $0.76 per share. That’s up from $331 million and $0.67 per share in the same quarter last year. Year to date, earnings reached $883 million, showing that growth isn’t stalling despite higher costs and regulatory hurdles. Part of that growth came from the FortisBC Energy investment in the Eagle Mountain Pipeline, and favourable exchange rates helped, too. But most of the improvement came from good old-fashioned rate base growth, a sign that the company’s long-term investment strategy is working.
Fortis isn’t sitting still either. It invested $2.9 billion in capital expenditures during the first half of the year and remains on track with its full-year $5.2 billion plan. The goal is to increase its midyear rate base from $39 billion in 2024 to $53 billion by 2029. That would translate into a 6.5% compound annual growth rate, and that’s what will ultimately power future earnings and dividend hikes.
Earning income
Speaking of dividends, Fortis offers a yield of about 3.5% at writing, with a payout ratio under 72%. It has raised its dividend for 51 consecutive years and is guiding for annual increases of 4% to 6% through at least 2029. You won’t get rich off the yield alone, but that kind of reliability is what gives dividend investors peace of mind. Even still, a $7,000 investment right now could pay investors $240 annually.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| FTS | $70.73 | 98 | $2.46 | $240.12 | Quarterly | $6,930.54 |
If you’re watching for risk, the most obvious is debt. With over $33 billion in debt and a debt-to-equity ratio above 130%, Fortis is highly leveraged. But that’s not unusual for utilities. Its cash flows remain solid, with $4.3 billion in operating cash flow over the past year. Another key area to monitor is regulation. Fortis has proposed rate adjustments in places like Arizona and New York. These decisions can take time, and the outcomes matter. Still, Fortis has a strong track record of navigating the regulatory environment and continues to secure approvals that support its growth plans.
Bottom line
At the end of the day, Fortis is built for resilience. Its business model doesn’t depend on flashy tech or discretionary spending. It’s powered by the fact that people need electricity and gas, whether markets are up or down. For long-term investors who want steady income, a low beta, and a chance to sleep at night, Fortis fits the bill. Through inflation, recessions, and market crashes, this dividend knight just keeps marching forward.
