There’s no such thing as a no-brainer investment. I’ve found that out the hard way. Indeed, plenty of companies in the market with solid momentum certainly look like they’re bound for new highs, week after week, quarter after quarter. Inevitably, one catalyst or another can take such a stock off its ride higher and turn a given holding into an exercise in patience.
I’m taking that approach to markets heading into what I think could be a much more volatile 2026 than what we’ve experienced in the years following the onset of the pandemic.
That said, I do think Fortis (TSX:FTS) is about as close to a no-brainer pick in this current market, for a variety of reasons.
Here’s why I’m still very bullish on this name heading into the New Year, even after its impressive run shown above.
We’re gonna need more power
What’s interesting about the economic growth we’ve seen for much of the past few decades is that this growth has been disproportionally a result of surging investment in new technologies. Name your technology, doesn’t matter. If it beeps, buzzes, has a screen, or otherwise entertains and occupies folks’ time, it’s going to require significant back-end power.
The applications that have made our lives so enjoyable do come with a cost. That is: we require ever-increasing amounts of power to not only provide the sort of AI and machine learning algorithms most applications utilize, but plenty of energy to store the data that already exists.
This insatiable demand for data has meant that companies like Fortis providing electric and natural gas utilities to a mix of residential and commercial customers will likely find themselves in the economic sweet spot. Being able to push regulators for greater price increases to support network upgrades, while we all pay more for electricity, means there’s one winner in this equation (and it’s not us).
Investors can still win, though
While you and I may bemoan our ever-increasing utility bill, the reality is that Fortis’ incredible profit growth I expect to see arise from these beneficial economics should find its way right back into investors’ pockets.
That’s because in addition to being a good steward of investor capital in putting this capital to work in long-duration upgrades, which drive higher profitability over time, Fortis has turned into one of the best dividend stocks in the market.
With one of the longest dividend growth streaks on the TSX and a still-meaty 3.6% dividend yield, this is a stock I think most investors would do well to buy here, and keep adding to over time.
