H:CC - 3 Canadian Utility Stocks With Stable Returns (and Dividends Too!)
2023-07-18 19:15:00 ET
The S&P/TSX Capped Utilities Index was down nearly a full percentage point in early afternoon trading on Tuesday, July 18. Today, I want to target three top Canadian utility stocks that have delivered stable returns in recent years. These equities are also dependable dividend stocks. Let’s dive in.
This utility stock is on track to become another Dividend King
Fortis ( TSX:FTS ) is a St. John’s-based utility holding company. Shares of this utility stock have dipped 1.5% month over month at the time of this writing. The stock is up marginally so far in 2023.
This company released its first-quarter (Q1) fiscal 2023 earnings on May 3. Fortis reported adjusted net earnings per share (EPS) of $0.91 — up from $0.78 in Q1 2022. Meanwhile, it saw capital expenditures of $1.0 billion, which kept it on track to reach $4.3 billion for the full year. That five-year capital plan aims to dramatically grow Fortis’s rate base through to 2027. The stock has delivered 49 consecutive years of dividend growth, putting it one year away from a dividend crown.
Shares of this utility stock currently possess a favourable price-to-earnings (P/E) ratio of 18 . Fortis offers a quarterly dividend of $0.565 per share. That represents a solid 4% yield.
Why Emera is a rock-solid target in July
Emera ( TSX:EMA ) is a Halifax-based energy and services company that is engaged in the generation, transmission, and distribution of electricity to various customers. This utility stock has dipped 1.4% over the past month. Its shares have increased 1.4% in the year-to-date period.
In Q1 2023, the company reported adjusted net income of $268 million, or $0.99 per common share — up from $242 million, or $0.92 per common share, in Q1 2022. Emera management was pleased with the strong start to the 2023 fiscal year. The company is also moving forward with a multi-billion-dollar capital plan that is focused on bolstering its bottom line and supporting solid dividend growth through the years.
This utility stock last had an attractive P/E ratio of 12. Emera has delivered 16 straight years of dividend growth, making it a top Canadian Dividend Aristocrat. It currently offers a quarterly distribution of $0.69, which represents a strong 5.1% yield.
One more dependable utility stock I’d snatch up right now
Hydro One ( TSX:H ) is the third and final utility stock I’d look to snag in the second half of July 2023. This Toronto-based electricity transmission and distribution company made its debut on the TSX Index back in 2015. Shares of Hydro One have jumped 2.4% month over month at the time of this writing. The stock is up 1.3% so far in 2023.
This company unveiled its Q1 2023 earnings on May 5. Hydro One delivered revenues of $2.07 billion — up from $2.04 billion in the prior year. Meanwhile, higher operation, maintenance, and administration costs led to a dip in earnings. Regardless, Hydro One is a profit machine that investors can trust for the long term.
Shares of this utility stock possess a solid P/E ratio of 22. It offers a quarterly dividend of $0.296 per share, representing a 3.1% yield.
The post 3 Canadian Utility Stocks With Stable Returns (and Dividends, Too!) appeared first on The Motley Fool Canada .
Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool recommends Emera and Fortis. The Motley Fool has a disclosure policy .
2023