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Companies involved in the utility business are often considered to be a little less risky in terms of investment as the demand for essential services is always present. These enterprises usually deal with the services of electricity, water supply and solutions, natural gas, etc. While the pandemic has affected the operations and production of such companies as well, some have managed to rebound more quickly than others.
On that note, let’s have a look at some utility stocks that also pay dividends to investors.
1. Capital Power Corp (TSX:CPX)
Capital Power develops and operates power plants, and has footprints in the coal, solar and wind power generation industry. The company has a market cap of over C$ 4.2 billion and its return on equity is 6.05 per cent, as per TMX.
Its dividend, at C$ 0.512, reflects a dividend yield of 5.172 per cent and holds a five-year dividend growth of 6.64 per cent.
In February 2021, Ethisphere Institute included Capital Power Corp, along with three other Canadian companies, in the list of 2021 World’s Most Ethical Companies.
The company reported revenue and other income of C$ 554 million for Q1 2021, up four per cent year-over-year (YoY). Its adjusted EBITDA for the latest quarter was C$303 million.
Over the last six months, shares of Capital Power Corp have surged nearly 27 per cent.
©Kalkine Group 2021
2. Fortis Inc (TSX: FTS)
Fortis operates in the power transmission and distribution industry, serving customers in Canada and the US. Its market cap is over C$ 25.6 billion and its return on equity is 7.12 per cent, as per TMX.
The utility company holds a dividend yield of 3.706 per cent for its quarterly dividend of C$ 0.505.
Fortis reported net earnings of C$ 1.2 billion in the fiscal year of 2020. Its stock rose about 3.6 percent in the last six months.
3. AltaGas Ltd (TSX:ALA)
Another player in the energy infrastructure space, AltaGas has business interests in the distribution of natural gas across North America. Its market cap is over C$ 6.5 billion and its return on equity is 5.81 per cent.
This dividend-paying stock pays C$ 0.083 per share to its shareholders on a monthly basis. The dividend yield of this stock is 4.27 per cent.
For Q1 2021, the company reported a normalized EBITDA of C$ 674 million, as compared to that of C$ 499 million in Q1 2020.
AltaGas stock grew nearly 33 per cent over last six months.
4. Emera Incorporated (TSX:EMA)
Emera focuses on the energy business in North America and various Caribbean nations. Its market cap is over C$ 14.1 billion and its return on equity is 12.02 per cent, as per TMX. Its quarterly dividend of C$ 0.637 holds a dividend yield of 4.586 per cent.
For Q4 2020, the company’s net income was C$ 273 million, up from that of C$ 193 million in Q4 2019.
Emera’s shares have surged nearly three per cent over the past six months.
5. Northland Power Inc (TSX: NPI)
Northland is a major player in Canada’s renewable power generation sector. The company’s market cap is nearly C$ 9 billion and its return on equity is 33.29 per cent, as per TMX.
Northland posts a dividend yield of 2.973 per cent for its monthly dividend of C$ 0.10.
The company reported a net income of C$ 485.1 million for fiscal year 2020, up from C$ 451.8 million in 2019.
The clean energy stock dropped about five per cent over past six months.
The above constitutes a preliminary view and any interest in stocks should be evaluated further from investment point of view.
