Investors looking to invest $20,000 in a safe dividend stock could consider investing in the utility sector. While no stock is completely risk-free, utility companies are viewed as defensive because they provide essential services. Regardless of whether the economy is booming or slowing, demand for electricity, natural gas, and water tends to remain stable, giving utility companies the resilience to generate steady returns.
Another important factor to highlight is that utility stocks benefit from their regulated business model. This operating structure enables these companies to generate predictable, growing earnings, helping reduce volatility in their cash flows. This financial stability has historically supported consistent dividend payments, making Canadian utility companies a reliable source of income for long-term investors.
The sector’s outlook also remains encouraging. Growing energy demand from electrification trends, population growth, and ongoing infrastructure investment is expected to support future growth. Overall, these factors position utility companies to continue delivering dependable dividends along with the potential for long-term capital appreciation.
With that context, here is a relatively safer Canadian dividend stock to buy right now.
A top dividend stock to consider now
Fortis (TSX:FTS) is one of the most reliable stocks in Canada’s utility sector for investors seeking worry-free income for decades. Fortis focuses on power transmission and distribution and generates stable revenues. Moreover, its rate-regulated operating structure and predictable cash flows relatively shield it from economic downturns, supporting steady dividend payments and growth.
Thanks to its defensive business model and growing cash flow, Fortis has increased its dividend for over five decades. In November 2025, Fortis raised its dividend by 4.1%, extending its streak to 52 consecutive years of dividend growth. Moreover, it offers a well-covered yield of about 3.5%.
Beyond income, Fortis has also delivered solid capital gains. Over the past year, its shares have risen about 23%, driven by strong operating results, improving market sentiment, and rising electricity demand. With its resilient business model and steadily expanding cash flow, Fortis appears well-positioned to continue rewarding shareholders through 2026 and beyond.
Fortis to raise dividend by 4% to 6%
Fortis is well-positioned to extend its long track record of dividend increases, supported by a defensive business model, low-risk earnings, and a a $28.8 billion capital investment plan scheduled over the next five years.
Fortis’s capital plan focuses on regulated utility projects. By concentrating capital spending on regulated assets and avoiding execution risks associated with large, complex development projects, the company is expanding its low-risk earnings base.
As these investments are deployed, Fortis’s consolidated rate base is projected to grow significantly, from roughly $42 billion in 2025 to about $58 billion by 2030. The rising rate base will drive its earnings and enable the company to deliver annual dividend growth in the 4% to 6% range.
Fortis will also benefit from the rising electricity demand from energy-intensive industries, including manufacturing and data centres. Meanwhile, the company’s ongoing divestment of non-core assets is strengthening the balance sheet.
In summary, Fortis stock offers stability, steady dividend income, and growth, making it a relatively safer stock to buy right now.
