As geopolitical tensions and trade-related uncertainties remain elevated heading into late 2026, investors could consider defensive sectors such as utilities. These businesses benefit from essential demand, regulated revenue frameworks, and comparatively stable cash generation. At the same time, the sector is benefiting from higher electricity demand driven by the expansion of AI data centres, the reshoring of industrial activity, and ongoing investments to modernize aging power grids.
In the utility space, Fortis (TSX: FTS) is an attractive stock for stability, dividend income, recession resilience, and long-term growth.
Fortis is one of North America’s major regulated electricity and natural gas utilities. The company has a strong track record of returning capital to shareholders through consistent dividend payments and regular dividend increases. Fortis stock has also delivered solid capital gains over the past three years, growing at an average annualized rate of 16.4%.
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Fortis stock to deliver solid total returns
Unlike high-growth technology companies, Fortis will not deliver significant capital gains in a short span. However, Fortis is one of Canada’s top dividend stocks, and its steady earnings base positions it well to deliver reliable total returns across different market conditions.
Fortis benefits from stable and relatively predictable cash flows that are less exposed to commodity-price volatility and economic downturns. Moreover, its emphasis on electricity transmission and distribution further strengthens its financial stability by reducing direct exposure to power generation. This supports the company’s ability to steadily increase shareholder returns.
Fortis has raised its annual payout for 52 consecutive years. This makes it one of Canada’s most dependable dividend-growth companies. With another increase anticipated toward the end of 2026, Fortis appears positioned to extend this streak, supported by its regulated business model and growing asset base.
The company expects to invest approximately $5.6 billion in 2026, with almost half of its annual capital program already deployed by June. Under its long-term plan, Fortis intends to invest $28.8 billion by 2030, potentially expanding its rate base to $57.9 billion. This growth will drive its earnings, supporting dividend increases of 4% to 6% annually.
Looking ahead, Fortis is well positioned to benefit from U.S. transmission projects, grid modernization, and renewable natural gas and LNG infrastructure in British Columbia. In the long run, Fortis is likely to capitalize on structural demand drivers, including the growing adoption of electric vehicles, rapid data centre expansion, and rising electricity consumption across the residential, commercial, and industrial sectors. Together, these trends could support sustained demand for Fortis’s regulated infrastructure and provide a solid foundation for long-term growth.
Is Fortis stock a buy, sell, or hold?
Fortis stock appears to be a hold rather than an outright buy or sell in late 2026. Its regulated utility operations, predictable cash flows, and strong track record of dividend growth provide a solid defensive foundation. At the same time, continued investment in its rate base should support steady earnings and dividend growth over the long term.
However, investors should not expect Fortis to deliver the rapid share price gains typically associated with growth stocks. The stock also does not appear particularly inexpensive from a valuation perspective, which may limit near-term upside.
Overall, Fortis’s planned capital investments, exposure to grid modernization, and rising electricity demand driven by data centres, electrification, and industrial activity support its long-term growth prospects. Existing shareholders will continue to benefit from dependable dividend income and gradual capital appreciation. Meanwhile, new investors could accumulate shares during periods of weakness or when valuations become more attractive.
