Hydro One vs. Canadian Utilities: The Dividend Stock I’d Own Through 2026

When markets turn choppy, the “boring” utility with the bigger yield and longest dividend streak can end up being the smarter 2026 hold.

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published May 28, 4:00 pm EDT

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.

investor looks at volatility chart — Source: Getty Images

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.