It’s not always easy to find a dividend stock that combines dependable income with meaningful long-term growth. Many investors focus on high yields, but strong businesses with predictable cash flow and room to expand often make better investments over time. And when such a dividend stock pulls back or trades below its long-term potential, it can create an attractive entry point for patient investors.
Utility stocks could be a good example of that balance. Their services are essential, which helps keep demand stable regardless of economic conditions. That stability can translate into reliable earnings and dividends. Let’s take a closer look at one top Canadian dividend stock from the utility sector that stands out as a long-term buy-and-hold investment right now.
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A dividend-paying stock built for stability
The stock I want to highlight is Algonquin Power & Utilities (TSX:AQN), a diversified utility firm that provides electricity, natural gas, water, wastewater, and transmission services to more than one million customer connections across Canada and the United States. The company focuses on delivering essential services, which gives it a relatively predictable business model and a recurring revenue base.
As of June 2, AQN stock traded at $8.19 per share and carried a market cap of $6.3 billion. While the stock has risen nearly 11% over the last year, it still trades nearly 16% below its 52-week high. The company also rewards its investors with reliable quarterly dividends and currently offers a yield of 4.3%.
Recent results show resilience despite an uncertain economic environment
In the first quarter (ended in March 2026), Algonquin’s adjusted net profit fell by nearly 9% year-over-year (YoY) to US$99.6 million. While this profit figure was slightly lower than a year ago, it remained solid given the broader economic environment.
The company’s regulated services segment continued to be its largest earnings contributor, generating net profit of US$119.4 million. Meanwhile, its hydro group reported net profit of US$2.1 million, compared with US$16.6 million in the first quarter of 2025, primarily due to a tax basis step-up related to the hydro group’s reorganization.
More importantly, Algonquin continues to demonstrate operational and financial discipline through its “Back to Basics” strategy, which focuses on strengthening core operations and improving long-term shareholder value.
What could drive future growth?
One of the biggest reasons investors may want to consider Algonquin for the long haul is its focus on becoming a premier pure-play regulated utility. Regulated utility businesses tend to provide largely predictable earnings and cash flows, which can support growth and dividend payments.
Lately, the company has also made meaningful progress on the regulatory front. In the last year, it received orders resolving rate cases in Missouri, California, and Massachusetts, while also filing a settlement agreement in Arizona. These developments could give it greater earnings visibility and support its future revenue growth.
Another long-term advantage is Algonquin’s focus on sustainable energy and water solutions. As demand for cleaner energy infrastructure continues to grow, the company is positioned to benefit from ongoing investment in essential utility services.
Foolish takeaway
Algonquin Power & Utilities combines a stable utility business, a 4.3% dividend yield, and a strategy focused on long-term regulated growth. While it may not deliver overnight gains, its dependable operations, improving financial flexibility, and exposure to growing energy and water infrastructure needs make it a great dividend stock for investors willing to think in decades rather than months.
