They say boring is good — and when it comes to investing, that often holds true. Utility stocks may not be as popular among new investors as tech stocks, but they offer great stability. In addition to their stable cash flows, regulated pricing, and essential services, some Canadian utility companies also deliver reliable performance and dividends across economic cycles — making them attractive buy-and-hold stocks for long-term investors.
Capital Power (TSX:CPX) could be one such great stock to consider. With a focus on flexible power generation and long-term projects across Canada and the U.S., this utility firm is showing no signs of slowing down. In this article, I’ll walk you through what’s driving Capital Power’s recent momentum and why this “boring” stock could be a smart pick for long-term TSX investors today.
A closer look at Capital Power’s business
If you don’t know it already, Capital Power is an Edmonton-based power producer with around 12 gigawatts of generation capacity spread across 32 facilities in North America. The company mainly focuses on flexible natural gas generation, renewable energy, and energy storage.
After rallying by 43% over the last year, its stock currently trades at $72.34 per share with a market cap of $11.3 billion. And for income-seeking investors, it offers a quarterly dividend with a 3.8% annualized yield — which has just been raised for the 12th consecutive year.
Growth through big acquisitions and stable cash flows
One of the key reasons behind the recent surge in CPX stock is its bold expansion moves in the U.S. power market. In June, the firm completed its largest acquisition to date — the $3 billion purchase of the Hummel Station in Pennsylvania and Rolling Hills Generation in Ohio. These are both natural gas facilities with a combined capacity of 2.2 gigawatts. This acquisition added significant scale to its flexible generation portfolio in one of the most liquid electricity markets in North America.
Despite the size of the deal, Capital Power stayed within its financial limits, which helped it maintain an investment-grade credit rating. The company’s management expects to optimize the newly added U.S. facilities further for commercial gains over time, which should boost its margins.
While large acquisitions can sometimes be risky, Capital Power’s disciplined approach and diversified portfolio seem to be paying off. Even after accounting for integration costs and higher debt, the company managed to generate $322 million in adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) in the second quarter.
Long-term strength despite short-term pressure
For the June 2025 quarter, Capital Power posted a net loss of $132 million due mainly to unrealized changes in the value of commodity derivatives and acquisition-related costs.
Nevertheless, the company’s core operational strength remained visible as it recorded $235 million in adjusted funds from operations and $143 million in net cash flows from operations. These cash flow metrics are really important for a utility company as they support dividend payments and fund long-term projects.
Why this stock could build wealth for years to come
Interestingly, Capital Power is currently advancing four long-term contracted projects in Ontario, adding up to 310 megawatts of capacity. Recently, it also kicked off construction on two new solar facilities in North Carolina, which are expected to come online between late 2026 and early 2027.
Another big win for the company came from a new power purchase agreement for its Midland Cogeneration Venture in Michigan, which secures payments for 1,240 megawatts of capacity starting in 2030. From solar to gas, and now battery storage and long-term contracts, Capital Power seems ready for the next chapter of energy demand.
While CPX stock may not have the hype of a tech stock, for long-term investors looking to build wealth on a solid base, it’s hard to ignore this utility player with this much momentum.
