Market volatility in 2026 has pushed investors to seek out more stable investment options. Canadian utility stocks represent one of those stable options for investors.
Utility investments offer the opportunity for investors to benefit from the stable, regulated cash flows while benefiting from the dividends that they offer. And now that rates are no longer rising, it’s an opportune time to reconsider these long-term picks.
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The appeal of Canadian utility stocks
The regulated aspect of utilities, and the reliable, defensive revenue they generate, is at the core of that appeal. Utilities provide a service. The terms of that service are set out in long-term regulated contracts that span decades.
As long as the utility continues to provide that service, it will generate a recurring revenue stream. And that revenue stream is predictable, which means that the utility can then offer a dividend and plan for growth investments.
The other side of that model is demand. Utilities provide essential services that can’t be traded down or reduced when the economy gets shaky. Contrast this to consumer retail, where even essential purchases like groceries can shift to lower‑cost options when times are tough.
What this means for investors is that utilities continue to generate a consistent revenue stream regardless of market performance.
It may not be the high-growth option that other sectors are seeing, but that’s the trade-off. Stable growth, reliable income, and decades of consistent dividend growth.
But where should investors begin? While there’s no shortage of reasons why Canadian utility stocks are ideal fits for most portfolios, there are two stocks that fit that role.
Utility #1: Canadian Utilities
The first of two Canadian utility stocks to own right now is Canadian Utilities (TSX: CU). Canadian Utilities operates as a regulated utility with additional infrastructure‑based businesses.
The company operates multiple businesses that deliver electricity and natural gas to markets in Canada and internationally. Canadian Utilities also has exposure to pipelines, energy transmission and power generation assets.
In other words, Canadian Utilities is a regulated infrastructure company with a utility-like cash flow. This means that the company isn’t just influenced by demand for power, but also pipeline growth, gas transmission and other ongoing projects.
Prospective investors should also note that Canadian Utilities has significant growth prospects. This differs from the stereotype view of slow growth typically associated with Canadian utility stocks.
In the case of Canadian utilities, it’s investing $12 billion through 2030. That’s the largest spending plan to date, focused on growing its regulated utilities.
One of the key elements that draws investors to Canadian utility stocks, and by extension to Canadian Utilities, is the company’s dividend. Canadian Utilities offers investors a quarterly dividend that, as of the time of writing, works out to a yield of 3.82%.
Adding to that appeal is the fact that Canadian Utilities has provided an annual uptick to that dividend going back over 50 consecutive years without fail. In fact, Canadian Utilities has the longest dividend streak in Canada, and one of only two dividend knights in the country.
Utility #2: Emera
The second of two Canadian utility stocks to consider right now is Emera (TSX: EMA). Emera differs from Canadian Utilities both in terms of markets served and how it operates.
Emera has operations across the U.S., Canada and the Caribbean. The company is focused on regulated electricity generation, transmission and distribution. This makes it closer to what a pure-play regulated utility is over Canadian Utilities’s more diversified portfolio.
Emera’s presence in certain high-growth markets, particularly Florida, makes it a growth case as much as an income option. To illustrate that growth focus, Emera’s five-year capital plan, which comes in at nearly $20 billion, has nearly 80% of it allocated to Florida utilities.
Turning to income, Emera is equally impressive. The company offers a quarterly dividend with nearly two decades of consecutive annual increases. As of the time of writing, Emera offers a yield of 4.06%.
Will you buy these utility stocks?
Utility stocks like Canadian Utilities and Emera offer investors a way to generate a growing income stream from some of the most defensive stocks on the market.
In my opinion, one or both should be core holdings in any well-diversified portfolio.
