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Highlights:
- Fortis operates within the utility sector, known for consistent and resilient performance.
- The company boasts a dividend yield of 4.1%, with a history of 51 consecutive years of dividend increases.
- Fortis plans a $26 billion capital investment over the next five years, with projections of 4%-6% annual dividend growth through 2029.
Fortis Inc. (TSX:FTS), a prominent player in the utility sector, has built a reputation for its stable and reliable operations. This consistency positions it as a favored choice for those seeking regular dividend payouts. Utilities, by their nature, offer essential services, and companies in this sector often maintain steady revenue streams even during economic fluctuations. Fortis stands out within this group due to its robust financial health and a long-standing commitment to returning value to shareholders through dividends.
Dividend Yield and History of Increases
Fortis offers a dividend yield of 4.1%, surpassing the average yield of many other stocks, including the S&P 500, which sits at around 1.3%. This makes Fortis an appealing option for those looking for consistent payouts. What further differentiates the stock is its impressive streak of consecutive dividend increases, which currently stands at 51 years. This history of rising dividends reflects the company’s long-term financial stability and its ability to generate enough cash flow to continue rewarding shareholders.
Future Dividend Growth Potential
Fortis has outlined plans to continue growing its dividend at a steady pace. Recently, the company announced a 4.2% increase to its fourth-quarter dividend. Additionally, Fortis projects annual dividend growth in the range of 4% to 6% through 2029, supported by its stable operations and financial outlook. This growth is backed by the company's substantial capital expenditure plans aimed at expanding and modernizing its infrastructure.
Capital Investment Plans and Operational Expansion
Fortis has also unveiled a $26 billion capital plan set to roll out over the next five years. These funds are earmarked for enhancing its existing operations and pursuing new projects that align with its long-term growth strategy. This capital expenditure will help Fortis maintain its strong market position while continuing to deliver on its dividend promises. The company’s disciplined approach to investment ensures that it can meet its growth objectives without compromising financial stability.
