Investors: Should You Dump Fortis Stock and Buy This Dividend Knight Instead?

If you have ever treated a “dividend knight” like a forever stock, this is the moment to do a quick check-in. A dividend stock can stay high quality and still become a weaker buy if the price runs ahead of the fundamentals, if debt costs start biting, or if growth plans lose their shine. It also works the other way. A boring dividend stock can turn exciting when it lines up steady earnings, clear capital spending, and a dividend you can actually trust inside a Tax-Free Savings Account (TFSA). So let’s look at where this dividend stock lies.

FTS

Fortis (TSX:FTS) is about as classic as Canada gets in utilities. It owns regulated electric and gas businesses across Canada, the U.S., and the Caribbean, which means most of its cash flow comes from customers who pay their bills and regulators who set the rules. That boring setup can feel like a feature, not a bug, in a TFSA. It tends to smooth out the bumps that come with more cyclical sectors.

On earnings, Fortis delivered the kind of update that keeps income investors relaxed. In its third quarter of 2025, it reported net earnings of $409 million, or $0.81 per share, and adjusted net earnings of $0.87 per share. That adjusted number better reflects the underlying rhythm of regulated operations. Management also raised the fourth-quarter common share dividend to $0.64 per share, and it highlighted a long dividend growth streak that has become part of the brand.

The bigger story sits in the spending plan. Fortis laid out a 2026–2030 capital plan of $28.8 billion, which it expects to support about 7% annual rate base growth. It tied that to dividend growth guidance of roughly 4% to 6% through 2030. In short, it plans to build more regulated assets, earn a regulated return on those assets, and share some of the growth through a rising dividend. That’s the utility playbook you want, and it fits well in a TFSA where you can reinvest without tax drag.

EMA

Emera (TSX:EMA) offers a slightly different utility flavour, and that difference can matter. It also runs regulated utilities, but it has meaningful exposure to Florida through Tampa Electric and Peoples Gas, plus Nova Scotia Power at home. That U.S. growth angle can be a real catalyst when population and electricity demand rise, and it gives the dividend stock a stronger “growth utility” vibe than investors often assume. It also tends to pay a higher dividend yield than Fortis, which can feel more satisfying when you watch your TFSA income build.

Emera’s catalysts look clear right now, but the risks look real too. Florida growth and grid investment can drive steady earnings, yet storms, regulatory timing, and big capital needs can create lumpier quarters than Fortis investors are used to. Emera also has moving parts like the planned sale of New Mexico Gas Company, and that can create noise in reported results.

Earnings-wise, Emera’s third quarter of 2025 showed real improvement. It reported adjusted net income of $263 million, or $0.88 per share, and reported net income of $228 million, or $0.76 per share. It also unveiled a $20 billion capital plan for 2026–2030 and extended rate base growth guidance of 7% to 8% through 2030, with a heavy emphasis on Florida. That is the same core idea as Fortis, but with a different geography and, often, a higher yield profile.

Bottomline

So, should you dump Fortis and buy Emera instead? I would not frame it as a dump. Fortis still looks like a solid hold if you want maximum steadiness and a clear, regulated growth plan. Emera looks like a reasonable switch or add if you want a higher yield and you like the Florida-led investment runway, and you can stomach a bit more operational and regulatory noise. Right now, here’s what you can earn from a $7,000 investment in both dividend stocks.

If you feel torn, the most “adult” TFSA move might be splitting the difference, as the real win here is staying invested in high-quality cash-flow machines instead of hunting for perfection.