Utilities are often viewed as boring investments because their predictable business models generate little fanfare compared to high-flying sectors like technology or financial services. That label is ironic on the Toronto Stock Exchange, where one unglamorous utility stock is Canada’s first Dividend Knight that has paid investors for decades.
Canadian Utilities Limited (TSX: CU) started paying dividends in 1947. The $13.6 billion utility and infrastructure company also boasts an active dividend growth streak of 54 years. Any company that has increased its dividend for at least 50 consecutive years earns that Dividend Knight status.
For income-focused investors, including retirees, dividend sustainability matters more than popularity. Furthermore, price appreciation is a bonus for a top-tier utility stock. At $50.02 per share, CU pays a 3.66% dividend. As of this writing, current investors enjoy a market-beating return of +20.44% versus the TSX’s 12.8% year-to-date gain.
man withdraws money from ATM
Essential energy services
Canadian Utilities delivers essential energy services and participates in major infrastructure projects. The company aims to grow its dividend in line with the sustainable growth of its highly contracted and regulated earnings base.
Over 90% of earnings come from rate-regulated assets under the watchful eyes of government regulators. It operates within a protected framework where outsized profits are capped during economic booms, but cash flows are stable during downturns. Some say that CU is a bond proxy.
Management announced a $12 billion regulated utility capital investment. The five-year plan (2026-2030) is expected to expand the mid-year rate base at a 6.9% compound annual growth rate (CAGR), providing a runway for earnings and cash flow growth. This is one of the strongest points to consider CU as a retirement income investment.
Households and businesses need to keep their lights and heaters on regardless of the economic environment. Canadian Utilities raised dividends and kept investors whole on the quarterly payments during market disruptions like the dot-com bubble in 2000, the global financial crisis in 2008, and the global COVID-19 pandemic in 2020. Today, even with war anxiety, CU is beating the broader market.
Strategic pillars
Bob Myles, CEO of Canadian Utilities, said during the conference call for Q2 2026 in late July, “As we move through 2026, I want to again remind everyone of our focus to remain anchored on our three strategic priorities of Growth and Prosperity, Operational Excellence, and Financial Leadership.”
Myles believes consistent execution across these priorities positions CU well to continue to delivering on its growth objectives. In the three months ending June 30, 2026, all business units reported higher earnings. Also, during the quarter, earnings attributable to equity owners and cash flows from operating activities increased 15.3% and 26.3% year over year, respectively, to $128 million and $557 million.
Standout historical track record
Canadian Utilities stands out as the ultimate lifetime income vehicle. Shareholders have seen no lean years, only consecutive dividend hikes every year since 1972. CU is a clear winner in corporate longevity, backed by a compounding earnings base that has expanded across decades. A utility stock that delivers this level of peace of mind is anything but unglamorous.
