Owning high-quality defensive stocks, such as a top-notch utility business, is one of the smartest moves you can make when uncertainty lingers in the market and economy. That’s why so many investors are interested in Canadian utility stocks for 2026 and beyond.
With uncertainty lingering on interest rates, inflation and global trade tensions, considering adding high-quality defensive stocks to your portfolio makes a lot of sense.
It’s no secret that the stock market cycles, interest rates fluctuate, and global events create volatility. However, even with the market and economy constantly shifting, the truly reliable businesses keep delivering steady cash flows and growing dividends no matter what.
That’s why they’re some of the best investments to buy and hold for years. These stocks don’t just help you grow your capital; they also help protect it. Furthermore, when you buy these kinds of reliable stocks and hold them for the long haul, compounding works in your favour. Dividends are constantly increasing, earnings grow steadily, and total returns build reliably over decades.
That’s exactly why Canadian utility stocks stand out right now as some of the most dependable investments for 2026 and beyond.
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Why are utilities considered some of the lowest-risk stocks you can buy?
There are a few reasons why utility stocks are so reliable for investors to own. First and foremost, they provide essential services like electricity, natural gas, and water, which are services people and businesses need every day, regardless of economic conditions. So, they’re some of the most defensive businesses you can buy.
Furthermore, most utility stocks are heavily regulated, which means revenues and returns are overseen by government bodies for predictability. That regulation, combined with revenue and cash flow that hardly ever fluctuates, no matter what the economic environment, creates stable and, more importantly, predictable cash flows.
That’s essential because it’s what makes these utility companies such excellent dividend stocks. With such predictable revenue, utilities know how much they can increase their dividends and return to profits to investors, and how much of their earnings they need to retain to invest in more future growth.
Plus, in addition to how reliable utilities are as dividend payers, over the long haul, they have substantial natural growth potential.
For example, with electricity demand rising from electrification trends like electric vehicles, home heating shifts, data centres powering AI, and population growth, many utilities have strong tailwinds ahead.
So, if you’re looking to shore up your portfolio or just increase the passive income that your portfolio reliably generates, here is one of the top Canadian utility stocks worth considering.
One of the best picks for reliability and dividend growth
There’s no doubt that one of the very best utility stocks in Canada that you can buy and hold for the long haul is Fortis (TSX:FTS).
While Fortis simply provides electricity and natural gas transmission and distribution, the reason it’s one of the best utility stocks that Canadian investors can buy is its consistency and dividend growth potential.
First off, the company has increased its dividend every year for over 50 consecutive years. That’s the second-longest dividend growth streak in Canada.
In addition, though, Fortis often offers more dividend growth potential than many of its peers. It constantly keeps its payout ratio sustainable and executes on its growth strategy, making it one of the best dividend growth stocks you can buy.
In fact, because it’s one of the most reliable dividend stocks to own for the long haul, it often trades at a premium to some of its peers. And today, it offers a yield of roughly 3.2%.
