Safe dividend stocks rarely feel exciting. Then markets get choppy, rates stay stubborn, and suddenly those less exciting options look highly appealing.
That’s the strength behind Hydro One (TSX: H) and Canadian Utilities (TSX: CU). Both sell essential services, operate regulated assets, and can give investors income without asking them to bet on the next hot growth trend. But if I had to own only one through 2026, I’d lean toward Canadian Utilities.
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H
Hydro One stock has a very clean story. The company owns and operates most of Ontario’s electricity transmission system and serves millions of distribution customers. That gives it a wide moat, predictable demand, and a direct link to Ontario’s long-term electricity needs.
That relevance looks stronger today. Ontario needs more power for population growth, electric vehicles, industrial expansion, and data centres. Hydro One stock sits right in the middle of that buildout. The company reported first-quarter 2026 net income attributable to common shareholders of $391 million, up 9.2% from last year. Earnings per share (EPS) rose to $0.65 from $0.60. Those numbers show a utility still growing, not just coasting.
The dividend also moved higher. Hydro One stock raised its quarterly payout to $0.3531 per share for June 2026, up from $0.3331 earlier this year. That works out to about $1.41 annually, or a yield near 2.4% at recent prices. It’s not huge, but it looks well supported by a regulated business model and ongoing rate-base growth.
The risk? Hydro One stock already trades like a high-quality utility. Investors don’t get a bargain-basement yield trading at 26 times earnings. The company also depends heavily on Ontario regulation, capital spending approvals, and execution. A strong business can still deliver modest returns if investors pay too much upfront.
CU
Canadian Utilities offers a different appeal. It owns regulated electricity and natural gas utility assets, mainly through ATCO Energy Systems and ATCO Australia, along with energy infrastructure through ATCO EnPower. It’s still a utility, but it gives investors a broader mix than Hydro One stock’s Ontario-focused electricity network.
The big hook is the dividend. Canadian Utilities raised its dividend again in 2026, marking its 54th straight year of increases. That’s one of the best dividend records in Canada. The current quarterly payout sits at $0.46 per share, or about $1.85 annually. At recent prices, that gives investors a yield around 4.3%. So investors get more income upfront than with Hydro One stock, plus a much longer dividend-growth record.
The latest results also looked steady enough for income investors. Canadian Utilities reported first-quarter 2026 adjusted earnings of $242 million, up from $232 million last year. IFRS earnings came in at $224 million, slightly below last year’s $236 million.
Still, the growth pipeline gives Canadian Utilities something interesting for 2026 despite these mixed results. The company invested $353 million in capital expenditures during the first quarter, with 94% going into regulated utilities. The Yellowhead Pipeline Project, expected at $2.9 billion, could become a major long-term growth driver if approvals and execution stay on track. The Central East Transfer-Out electricity project also supports Alberta’s grid and renewables integration.
Bottom line
So which one would I own through 2026? Hydro One stock looks cleaner and more predictable. But Canadian Utilities offers the better dividend case. It pays a higher yield, carries an unmatched dividend-growth streak, and has visible infrastructure projects that could support future earnings. Both can earn income as well even with $7,000.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | ANNUAL DIVIDEND | ANNUAL TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| H | $59.07 | 118 | $1.41 | $166.38 | Quarterly | $6,970.26 |
| CU | $50.59 | 138 | $1.84 | $253.92 | Quarterly | $6,981.42 |
The risks remain real. Canadian Utilities faces rate decisions, debt costs, and project execution risk. Yet for investors looking for income first, it edges out Hydro One stock. Through 2026, I’d rather own the stock with the stronger yield and longer dividend resume. That now makes Canadian Utilities my pick for 2026.
