Holding cash in a bank account feels comforting. It’s safe, liquid, insured, and risk-free on paper. However, leaving large sums of money sitting idle in high-interest savings accounts or money market funds carries a hidden cost that many Canadian investors overlook. With the Bank of Canada keeping its benchmark interest rate anchored at 2.25% while persistent inflation squeezes purchasing power, static cash is actively losing ground every single day. Inflation at 3% means your cash is losing purchasing power while everyday living expenses rise much faster.

To beat inflation and put your wealth to work, you need investment options that offer a respectable immediate yield alongside a growing payout stream and potential capital appreciation. Capital Power Corporation (TSX: CPX) is a blue-chip stock with all three desirable attributes.

Capital Power stock: A better store of value than cash?

Edmonton-based Capital Power is an independent power producer that transforms essential electricity generation into a relentless cash-generating asset for its long-term shareholders. The Canadian utility stock offers an attractive dividend yield of 4.6% to new investors buying shares today.

Compare that 4.6% payout to the non-promotional sub-three-percent yields found in standard high-interest savings accounts (HISA) across the Big Six Canadian banks and their digital offspring, and the income advantage is instantly clear.

Most noteworthy, Capital Power stock doesn’t just hand you a steady dividend check today; it regularly gives you an annual raise. Management recently marked its 13th consecutive year of annual dividend increases in July, a strong commitment to returning capital to shareholders through every phase of the economic cycle. CPX stock could raise your payouts every year, no matter what the Bank of Canada decides to do with benchmark rates.

A dependable quarterly payout

Behind Capital Power stock’s dividend dependability lies its defensive business model. The utility operates a well-diversified fleet of power generation facilities across North America, securing a vast majority of its revenue through long-term power purchase agreements. Its contracted cash flows shelter the utility from short-term electricity price swings, creating a stable financial foundation.

At the same time, Capital Power is tapping into major structural growth drivers, including the skyrocketing power demand required to run artificial intelligence infrastructure and data centres. Its milestone 250-megawatt agreement with tech giant Meta Platforms highlights how the Canadian utility is well regarded by big-money clients for critical power projects, securing a high-margin, long-term revenue line tied to the artificial intelligence (AI) boom.

Capital Power maintains a conservative dividend payout ratio well below fifty percent of its projected adjusted funds from operations. Management has breathing room to reinvest internally generated cash flow into clean energy expansion projects while keeping the dividend well-protected. The dividend stock generates more than enough operational cash flow to fund project pipelines and service its balance sheet without putting its quarterly payout at risk.

Capital Power quadruples investors’ capital

An investment in Capital Power stock 10 years ago could have widely outperformed cash and bonds. Beyond the dividend that has grown, a $10,000 investment in Capital Power stock 10 years ago could have more than quadrupled into a $45,600 position – up 356% in a decade. Capital gains (stock price gains) would have done the heavy lifting to increase the investment to more than $26,000, while growing dividends, fully reinvested, carried the rest of the growth burden.

CPX stock’s dividend has risen by 80.7% over the past 10 years.

CPX data by YCharts

Cash hoarding couldn’t offer better returns.

Investor takeaway

Holding an emergency fund in cash is essential for financial security, but letting long-term capital sit on the sidelines doing nothing is a missed wealth-building opportunity. Capital Power stock offers Canadian retail investors a blend of defensive utility stability, an attractive 4.6% yield, and a track record of dividend growth that keeps your income outpacing inflation. If you want your cash to stop lying around and start generating real returns, Capital Power stock deserves a top spot on your watch list as we enter the fourth quarter of 2026.

The post Your Cash Is Sitting There Doing Nothing: This Dividend Stock Won’t Let It appeared first on The Motley Fool Canada.

More reading

• The Best Canadian Dividend Stock for Passive Income: My 1 Pick and Why
• Hammond Power Solutions Is Positioned for the Big Data Centre Buildout: Here’s How I’d Buy It
• How I’d Structure a $25,000 TFSA for Steady Income, Stock by Stock
• Reinvesting Dividends: How to Speed Up Your Income Growth
• What a Dividend Portfolio Could Pay You in 5, 10 and 20 Years

Fool contributor Brian Paradza has no position in any of the stocks mentioned. The Motley Fool recommends Capital Power and Meta Platforms. The Motley Fool has a disclosure policy.

Between persistent tariff wars, rate uncertainty, and mixed economic signals, the Canadian investing climate can feel weird right now. Rather than being driven by a booming local economy, Canada’s persistent 3% headline inflation looks propelled by external forces, including geopolitical oil supply shocks and trade conflicts, which threaten to push inflation beyond 3.2% by the fourth quarter. A cost-push inflation environment, whereby everyday costs stay high even if consumer demand feels sluggish, complicates decisions for investors trying to build robust portfolios that remain resilient in challenging times.

In times like these, a smart TFSA and RRSP investment approach may consider holding onto the resilient portfolio anchors – TSX dividend stocks whose cash flows and payouts are so predictable that market noise simply fades into the background. Fortis (TSX: FTS) stock is one ironclad dividend payer that consistently turns market chaos into a steadily rising stream of quarterly passive income. The Canadian utility stock deserves a prime spot on your buy list going into October.

Fortis stock: The champion with a 52-year dividend growth streak

When evaluating Canadian dividend stocks, past performance doesn’t guarantee future results — but 60 years of uninterrupted quarterly dividends, and five decades of relentless dividend raises say a lot about a TSX dividend champion’s business model. Fortis stock has established itself as the calm in the storm for dividend investors for decades now, and that label won’t fade with time but shine brighter.

Fortis, a $38.6 billion regulated electric and gas utility that traces its first public stock issuance back to 1949 when Newfoundland joined the Canadian Confederation, has paid regular dividends every year since going public in 1966, and increased its dividend payout every single year for 52 consecutive years, beginning in 1973.

FTS stock’s legendary dividend streak spans the stagflation of the 1970s, the dot-com bust, the 2008 Global Financial Crisis, and the 2020 global COVID-19 pandemic. No market storm or economic weirdness has ever rattled the dividend giant, and its investors kept receiving dividends as if the past five recessions in Canada never happened.

Should you buy FTS stock for the dividend?

Fortis appeals as a reliable, dependable and sustainable dividend stock to buy and hold in a long-term portfolio, however weird the broader economy may appear.

A new investment in Fortis stock today will earn a 3.4% yield during the first 12 months. The yield isn’t as flashy as some distressed 8% or higher payouts out there; I get that. But unlike high-yield traps that risk dividend cuts when economic trouble hits, Fortis’s well-covered payout looks set to ride any waves.

The yield could be marginally higher as management may raise quarterly dividends again in November. The utility’s current $28.8 billion five-year capital investment program may help sustain rate base growth and support a 4% to 6% annual dividend growth rate through 2030. Dividend growth may help protect your passive income stream’s purchasing power against Canadian inflation — as long as inflation rates remain below Fortis’s dividend growth rates.

And the payout appears secure.

A secure and sustainable dividend?

Could Fortis continue to pay dividends if Canadian economic risks worsen? Yes, it could. Fortis’s business operations stretch far beyond Canada into the United States and the Caribbean territories. The utility’s cash flow appears bulletproof, coming from a 99% regulated revenue base that insulates earnings and cash flow from commodity price swings and economic downturns.

Most noteworthy, Fortis maintains an adjusted payout ratio around 70% to 74% of earnings. The payout range leaves ample retained cash flow to reinvest into capital projects while comfortably supporting dividend increases.

Moreover, Fortis sits at the heart of the North American energy investment boom. It’s upgrading ageing transmission grids, connecting new power plants to an energy-intensive artificial intelligence (AI) economy, and powering new data centres and electric vehicle infrastructure over the next decade.

Investor takeaway

Trying to time volatile market turns can be a stressful game when the economy feels unpredictable. Fortis stock could be what any investment portfolio needs for defensiveness, stability, and a passive income stream that remains steady, calms nerves, and feeds income cravings, regardless of whatever happens to the North American economy.

Fortis stock is the financial calm in the middle of any storm for Canadian dividend investors seeking financial peace of mind.

The post Weird Economy? This Dividend Is the Calm in the Storm appeared first on The Motley Fool Canada.

More reading

• 52 Years of Dividend Hikes: Why Fortis Belongs in Your TFSA
• Starting With $25,000: How I’d Build Towards $500 a Month in Dividends
• RRSP vs TFSA for Retirement? Why Most Canadians Should Be Using Both
• TFSA Withdrawals in Retirement: A Tax-Free Source That Can Protect Your Benefits
• Fortis Raises Its Dividend 4% and Pledges More Growth Through 2031

Fool contributor Brian Paradza has no position in any of the stocks mentioned. The Motley Fool recommends Fortis. The Motley Fool has a disclosure policy.

Most Canadian investors have never heard of Caribbean Utilities (TSX: CUP.U), but this Caribbean utility stock is a hidden gem quietly offering one of the most compelling passive income investment opportunities on the Toronto Stock Exchange. It shares a lot in common with mighty Fortis (TSX: FTS) stock, and following a fresh 5% dividend hike in 2026, Caribbean Utilities stock has achieved a dividend growth spree that elevates its status.

Caribbean Utilities boasts an uninterrupted dividend payout history stretching back to 2005 alongside five consecutive years of dividend increases this year. Backed by long-term operating licenses that can extend through 2048, this offshore power provider delivers steady, high-yielding passive income that could comfortably sustain income portfolios for decades.

CUP.U Dividend data by YCharts

The mini-Fortis stock trading under the radar

Valued at roughly US$620 million ($868 million), Caribbean Utilities stock flies under the radar largely due to its small-cap size. Income investors naturally flock to mega-cap utility titans like $38 billion Fortis, which celebrated its impressive 52nd consecutive annual dividend raise in 2026.

However, investors who already hold Fortis stock actually own a piece of this Caribbean operation, as Fortis maintains a controlling 59.5% majority stake in the utility stock. As a key offshore regulated subsidiary, Caribbean Utilities shares the conservative corporate structure, disciplined capital allocation, and steady management principles of Fortis, its parent company.

An island monopoly to buy for USD-backed passive income

The main reason Canadians rarely encounter Caribbean Utilities’ brands and services comes down to simple geography. The utility generates, transmits, and distributes electricity across Grand Cayman in the Cayman Islands, located roughly 2,500 kilometres away from the nearest Canadian shore.

Canadian investors will never see its service trucks in Toronto or Calgary, but its economic moat is every bit as dependable as a domestic Canadian utility stock.

Operating under a 100% regulated utility model, Caribbean Utilities avoids the pricing volatility of merchant power markets. Instead, its cash flows are predictable and derived from a regulatory target return on equity applied directly to its invested capital base.

Beyond operational stability, the stock offers a distinct currency advantage for Canadian investors building a reliable passive income stream.

The utility’s operating currency, the Cayman Islands Dollar, is pegged to the U.S. dollar, and Caribbean Utilities trades on the TSX in U.S. currency while paying out U.S. dollar-denominated dividends.

While Fortis stock generates over half its earnings in United States dollars but pays dividends in Canadian dollars, Caribbean Utilities stock provides direct exposure to U.S. dollar cash flows.

Should you buy the TSX utility stock for its top sector yield?

Caribbean Utilities stock truly shines for its above-average dividend yield, sustained raises for five consecutive years that could make it comparable to dividend-growth champions, and sustainable payout levels.

Given its dividend yield of 5.5%, the small utility stock offers the highest yield in the Canadian utility stock peer group. By comparison, Fortis stock yields around 3.4%, Canadian Utilities stock sits at 3.6%, Emera stock offers 4.3%, Capital Power stock yields 4.6%, Algonquin Power & Utilities stock pays 4.8%, while infrastructure giant Brookfield Infrastructure Partners stock’s dividend yields 5%.

Importantly, Caribbean Utilities stock’s market-beating passive income stream doesn’t come at the cost of operational strength. During the first half of 2026, Caribbean Utilities reported a 5% year-over-year increase in total operating revenues and a 17% surge in net earnings. The Fortis-related utility maintains its dividend payout ratio under 70%, leaving plenty of headroom to reinvest in grid modernization while safeguarding its growing quarterly payout.

Supported by a 20-year transmission and distribution license renewable through 2048 and a generation license valid through 2039, Caribbean Utilities stock appears as an attractive, low-profile, Fortis-related TSX utility stock to buy for long-term passive income.

The post Why This Canadian Utility Stock Could Be the Best Stock You Never Think About appeared first on The Motley Fool Canada.

More reading

• 52 Years of Dividend Hikes: Why Fortis Belongs in Your TFSA
• Starting With $25,000: How I’d Build Towards $500 a Month in Dividends
• RRSP vs TFSA for Retirement? Why Most Canadians Should Be Using Both
• TFSA Withdrawals in Retirement: A Tax-Free Source That Can Protect Your Benefits
• Fortis Raises Its Dividend 4% and Pledges More Growth Through 2031

Fool contributor Brian Paradza has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Infrastructure Partners, Capital Power, Emera, and Fortis. The Motley Fool has a disclosure policy.