The utilities sector is considered a top defensive sector when fear, not greed, grips the market. Investors are likely to rotate to seek insulation from an impending economic fragility in 2026. In addition to continuing trade tensions and heightened geopolitical risks, there’s AI bubble anxiety.
Defensive holdings matter in the current environment. Investors are fortunate because there’s a defensive utility fortress and staple against economic fragility on the TSX. Emera (TSX: EMA) provides protection against external shocks and a cash cushion every quarter.
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Income stability
A company that keeps investors whole on its commitment to shareholders will always rank high on investors’ buy lists. Emera is a dividend grower, if not a bond proxy. The 19 consecutive years of dividend increases are proof of reliability and income stability.
The business model of this $20.7 billion energy and services company can withstand economic volatility. Around 96% of adjusted net income comes from regulated electric and natural gas utilities in Canada (Halifax) and the U.S. (Tampa, Florida). Emera also has regulated operations in the Caribbean.
Emera is a non-discretionary stock, too, as the demand for its services is elastic. Since consumers need them, consumption is predictable even during downturns. Also, the profit regulation, or “cap,” serves as a safety net; the company has enough leeway to charge enough to cover costs.
Solid earnings growth
Emera has yet to report its full-year 2025 financial performance, but the results after the first three quarters are mighty impressive. In the nine months ending September 20, 2025, adjusted net income rose 45.6% year-over-year to $878 million. Its President and CEO, Scott Balfour, notes the continued strong operational performance at Tampa Electric.
The total annual capital spend across key projects in 2025 is estimated to reach $3.6 billion. It will be presented on February 23, 2026, during the Q4 2025 analyst conference call. The increase from the original $2.6 billion budget was due to the increased demand for core investments in modernization, reliability, resilience, and generation capacity, driven by key market conditions. Renewables integration is also accelerating.
There is more good news for 2026 and beyond. A new capital plan will deliver solid and sustainable growth for current and prospective investors.
Essential investments
Emera will implement an investment strategy worth $20 billion from 2026 to 2030. Balfour said the new five-year capital plan will add essential and cost-effective investments to the existing portfolio, notably Tampa Electric and Peoples Gas in Florida (80%).
Under the plan, Emera will maintain its 7% to 8% rate-based growth trajectory to realize a rate base expansion from around $28.3B to $40B by 2030. More importantly, the executable capital plan should support management’s dividend growth guidance of 1% to 2% annually through 2030.
Emera operates in constructive regulatory environments. The harmonious relationship and collaboration with the regulatory bodies ensure long-term value creation for customers and the utility assets.
Enter the Fortress
Emera is a fortress for its regulated infrastructure if the market turns fragile in 2026. The premier defensive stock promises uninterrupted income streams, not explosive growth.
