I usually never find myself getting excited about a company announcing that it plans to spend billions of dollars. If anything, my first reaction is to wonder where all that money is going and how long it will take shareholders to see a return. But Fortis (TSX: FTS) has given Canadian investors a big reason to take a closer look at its latest investment plans.
The St. John’s-based firm recently unveiled the largest investment plan in its history, committing $32.2 billion to capital projects between 2027 and 2031. That is not simply a bigger budget. It gives investors a clearer view of how this regulated utility intends to grow its business and support future dividends. The news comes as the company’s shares have already enjoyed a solid rally this year, adding another factor for investors to consider.
Let’s explore what Fortis’s record spending plan could mean for FTS stock and its long-term shareholders.
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Fortis stock and its latest results
If you don’t know it already, Fortis operates regulated electricity and natural gas utilities across Canada, the United States, and the Caribbean. Its shares have climbed 19% year-to-date, currently trading at $84.91 per share. At this price, this Canadian utility stock has a market cap of $44.1 billion and offers a 3.1% annualized dividend yield.
These gains in Fortis stock could be the result of its strong financials and expanding investment pipeline. Let’s take a closer look.
What has driven Fortis stock higher?
In the third quarter, Fortis posted net profit of $474 million, up nearly 16% year-over-year (YoY). Its earnings rose to $0.92 per share from $0.81. This underlying growth mainly came from investments across its regulated utilities, which expanded its rate base, or the assets on which utilities can earn regulated returns.
Higher retail electricity sales and the timing of operating costs at UNS Energy also boosted its results. Still, higher financing costs and expenses that have yet to be reflected in customer rates partly offset those gains.
Why its $32.2 billion plan matters
Fortis’s newly announced $32.2 billion capital plan is $3.4 billion larger than its previous forecast. Much of the increase comes from additional U.S. electricity transmission projects through ITC, including a US$1 billion project in Iowa, with half of that amount included in the updated plan.
Meanwhile, Fortis also plans to invest in its Tilbury liquefied natural gas facilities in British Columbia, alongside network reliability improvements and projects supporting customer growth. The company expects to spend around $6 billion in 2026 alone, up from its earlier $5.6 billion forecast, partly because some transmission and Tilbury work has accelerated.
These investments are expected to lift Fortis’s midyear rate base from $45.3 billion in 2026 to $63.9 billion by 2031, suggesting 7.5% annualized growth over five years. If the projects proceed as expected, the company’s expanding asset base could become an important driver of future earnings growth.
More growth beyond the current plan
Beyond its latest announcement, Fortis’s U.S.-based electricity transmission subsidiary, ITC Holdings, sees another US$2.9 billion to US$3.4 billion in potential transmission investments beyond the current five-year plan. FortisBC’s proposed Tilbury Phase 2 expansion could represent an additional $2 billion to $4 billion investment, mostly after 2031, although it still requires a final investment decision.
Interestingly, Fortis has also raised its fourth-quarter common dividend by 4% and expects annual dividend growth of 4% to 6% through 2031.
For long-term investors, this combination of regulated asset growth, a record investment pipeline, and rising dividends makes Fortis an attractive TSX stock to consider right now, even after its recent rally.
