Investors are drawn to exciting stocks. Fast-moving, high-growth picks. High-tech companies that promise to solve every problem. Speculative ideas with sky-high valuations. But when it comes down to results, it’s the boring, steady companies that tend to outperform. These are businesses with real earnings and essential services that compound year after year.
Quality investing doesn’t grab the headlines. It rarely becomes a trending topic, but it works. Predictable, repeatable, and grounded in fundamentals that continue to show up.
For Canadian investors who are seeking that consistency rather than drama, there’s one clear option to consider.
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Meet the boring investment your portfolio needs
That boring investment to buy now and hold for decades is Fortis (TSX: FTS). Fortis is one of the largest utility stocks in North America and offers a solid reputation of being a stable, dependable, and long-term option for any portfolio.
One of the main reasons why Fortis stands out as a quality company to consider can be traced back to its business model. As a utility stock, Fortis provides necessary services to its customers located across Canada, the U.S., and the Caribbean. Fortis generates a stable revenue stream from those operations, which is backed by long-term regulated contracts. Those earnings, in turn, support long-term compounding.
The necessity of utility services makes Fortis one of the most defensive options on the market. It also ensures that Fortis avoids the boom-and-bust cycles that hype stocks typically fall into.
As far as investment stocks go, Fortis adheres to the boring investment strategy perfectly, but it does offer a twist.
Utility stocks like Fortis usually follow a stereotype. Specifically, they lack the funds or incentive to invest in growth. Instead, they focus on their reliable business to generate recurring revenue.
Fortunately, that’s not entirely true.
Yes, Fortis is a boring stock that follows a predictable business model. It generates a recurring revenue stream and pays out a respectable dividend (more on that in a moment).
But there’s more.
Fortis is also known to take an aggressive stance on growth. The company has completed sizable acquisitions over the years, all of which have increased Fortis’ revenue reach and footprint across North America.
In recent years, that growth has shifted to transitioning facilities to renewables and upgrading existing facilities. The company even has a massive capital expenditure plan to run through the end of the decade to fund that growth.
Quality stocks lead to stable dividends
Fortis’ regulated utility business provides both electric and natural gas essential services. The revenue generated from that recurring revenue stream allows the company to pay out one of the most stable dividends on the market. As of the time of writing, Fortis pays out a handsome dividend with a yield of 3.4%.
For investors with $20,000 to allocate towards Fortis, that works out to just over $680 each year. And that’s not even the best part.
Fortis has provided annual upticks to that dividend for 51 consecutive years without fail. In fact, Fortis is one of just two stocks in Canada that have hit that 50-year milestone, earning them the name Dividend Kings.
Between the stable, recurring revenue stream, defensive appeal, and growing dividend, it’s hard not to argue that Fortis is the boring investment that belongs in every investor’s portfolio.
Fortis: The boring investment your portfolio needs
Quality stocks like Fortis aren’t flashy, and they do not generate hype. What they provide is a steady stream of revenue, reliable dividends, and one of the best defensive picks on the market.
When it comes to boring stocks like Fortis, sometimes boring can be a brilliant pick for any well-diversified portfolio.
Buy it, hold it, and watch your future income grow.
