The risk of a recession is rising as persistently high oil prices and ongoing geopolitical tensions could weigh on global economic growth. Last month, the International Monetary Fund lowered its global growth forecast for this year to 3.1% and warned that an escalation of the Middle East conflict could push oil prices above US$110 per barrel. Such a surge in energy prices could significantly weaken economic activity, potentially reducing global growth to 2% and increasing the likelihood of a severe global recession.
If investors are worried about these risks, they should focus on strengthening their portfolios with high-quality dividend stocks that can generate stable, reliable passive income. With that in mind, let’s look at three dependable dividend stocks that could help investors navigate economic uncertainties.
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Fortis
Fortis (TSX: FTS) operates a highly regulated utility business that serves approximately 3.5 million customers across the United States, Canada, and the Caribbean with electricity and natural gas. With a regulated asset base and a strong focus on low-risk transmission and distribution operations, the company’s financial performance remains relatively insulated from broader macroeconomic volatility. Its consistent rate-base expansion and ongoing efforts to improve operational efficiency have steadily supported both earnings growth and shareholder returns.
Over the last 20 years, Fortis has delivered an average total shareholder return of 10.5%. The company has also built an impressive dividend track record, increasing its payout annually for 52 consecutive years. It currently offers a forward dividend yield of 3.32%.
Looking ahead, Fortis continues to expand its asset base to meet growing energy demand. The company is advancing its $28.8 billion capital investment program, which could increase its rate base at an annualized rate of 7% through 2030. In addition, Fortis continues to focus on preventive maintenance, operational innovation, and efficiency initiatives to support long-term profitability. Backed by these growth investments, management expects to increase the dividend by 4–6% annually through 2030, making Fortis an attractive defensive investment.
Hydro One
Another stock that could remain resilient during a recession is Hydro One (TSX: H), a pure-play electricity transmission and local distribution company with no direct exposure to power generation. Approximately 99% of its business is rate-regulated and largely insulated from commodity price fluctuations, allowing the company to deliver stable financial performance across varying economic conditions and market cycles.
Over the last five years, Hydro One has generated a total shareholder return of approximately 127%, representing an annualized return of 17.8%. The company has also consistently rewarded shareholders, increasing its dividend at an annualized rate of 5.2% over the past eight years. It currently offers a forward dividend yield of 2.25%.
Looking ahead, rising electricity demand driven by economic growth, transportation electrification, and the expansion of artificial intelligence infrastructure is creating favourable long-term growth opportunities for Hydro One. To capitalize on these trends, the company is advancing an $11.8 billion capital investment program that could increase its rate base to $32.1 billion by the end of next year. Supported by its regulated business model, visible growth pipeline, and dependable dividend growth, Hydro One appears well-positioned to remain a solid defensive investment in today’s uncertain economic environment.
Enbridge
My final pick is Enbridge (TSX: ENB), which operates a diversified portfolio of contracted midstream energy assets, regulated utility operations, and renewable energy projects backed by long-term power-purchase agreements (PPAs). Approximately 98% of the company’s earnings come from contracted or regulated businesses, with nearly 80% linked to inflation, enabling Enbridge to generate stable and predictable cash flows regardless of commodity price swings or broader economic uncertainty.
Supported by these resilient cash flows, Enbridge has paid dividends for more than seven decades and increased its dividend annually for the past 31 consecutive years. The stock currently offers an attractive forward dividend yield of 5.16%.
Looking ahead, Enbridge continues to expand its asset base through a secured $40 billion capital investment program, with these projects expected to enter service over the next five years. These expansion initiatives could strengthen the company’s long-term financial performance and support future dividend growth. Meanwhile, the management expects to return approximately $40 billion–$45 billion to shareholders over the next five years. Given its resilient business model, visible growth pipeline, and reliable income stream, I believe Enbridge is well-positioned to help investors navigate the current uncertain economic environment.
