THIS DIVIDEND KNIGHT HAS GROWN ITS DIVIDEND FOR OVER 50 YEARS!

Inflation has been cooling, but it’s not out of the picture just yet. The latest Consumer Price Index (CPI) data in Canada showed a drop to 2.7% in April 2025, down from the previous month. That might sound like progress, but core inflation, the kind that matters to central bankers, has remained sticky. As a result, many Canadians are still feeling the financial squeeze in everyday life, from groceries to utility bills. And investors, especially those counting on passive income, are left wondering where to put their money in a world that’s anything but predictable.

Look to Fortis

One answer might be a company like Fortis (TSX:FTS). This Canadian utility has done what few others can claim: it has paid dividends for decades, without interruption, and has grown those payments every single year. In fact, it currently boasts a 51-year streak of dividend increases. That kind of consistency doesn’t happen by accident. Fortis earns that track record by running a stable business model based on the regulated utility, supplying electricity and natural gas to customers across North America.

Currently, Fortis stock trades at around $65 and offers an annual dividend of $2.46 per share. At a time when many dividend stocks are cutting payouts or watching profits shrink, that kind of yield backed by real earnings looks very appealing. And Fortis isn’t just standing still. It has a clear plan to grow that dividend by 4% to 6% annually through at least 2029, supported by a capital expenditure program of $25 billion over the next five years. Right now, a $10,000 investment could bring $379 in annual dividends!

Can it last?

In its most recent earnings report, Fortis posted net earnings of $499 million, or $1.00 per share, for the first quarter of 2025. That was up from $459 million, or $0.93 per share, in the same quarter a year earlier. The results were driven by an increased rate base and new rates in various jurisdictions, especially from its operations in Arizona and Newfoundland. These kinds of incremental gains might not be headline-grabbing, but they’re dependable – the kind of performance you want if your investment goals include monthly income and peace of mind.

Fortis also maintains a solid balance sheet. Its debt is manageable, and it continues to carry investment-grade credit ratings. That matters in today’s environment. As the Bank of Canada holds interest rates steady, with caution around cutting too soon due to persistent core inflation, companies with heavy debt loads will feel more pressure. Fortis, with its predictable cash flow and prudent management, is in a strong position to weather those risks.

Considerations

There are, of course, always reasons to be cautious. Utility stocks sometimes come under pressure when interest rates rise. Investors may prefer safer government bonds when yields climb, which can take attention away from dividend stocks like Fortis. But for those with a long time horizon, this utility still offers a powerful combination: stability, growth, and income. The core business isn’t glamorous, but it’s essential. People still need heat and power, regardless of what the CPI is doing.

That brings us back to the bigger picture. Inflation may be easing, but financial stress remains a reality for many. In this context, investing in a dependable dividend stock can feel like taking back a little control. You’re not betting on hype or trends. You’re building something solid, an income stream that grows with time and doesn’t vanish when markets turn volatile.

Bottom line

So if you’re looking for a place to park your cash in uncertain times, Fortis is hard to beat. Its dividend offers real value in today’s market, especially when backed by a 51-year track record. Inflation may not be gone yet, but a stock like Fortis offers one of the oldest tricks in the book for getting through it: steady cash, paid out every single month.

The post This Dividend Knight Has Grown Its Dividend for Over 50 Years! appeared first on The Motley Fool Canada.

More reading

• The Best Stocks to Invest $50,000 in Right Now
• Got $1,000? 3 Utility Stocks to Buy and Hold Forever
• 3 Reasons Fortis Is a Must-Buy for Long-Term Investors
• 3 Stocks to Consider for Your $7,000 TFSA Contribution This Year
• Want Decades of Passive Income? 3 Stocks to Buy Now and Hold Forever

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Fortis. The Motley Fool has a disclosure policy.

2025-06-18T00:14:59Z