No Result
View All Result
  • Login
Thursday, October 30, 2025
FeeOnlyNews.com
  • Home
  • Business
  • Financial Planning
  • Personal Finance
  • Investing
  • Money
  • Economy
  • Markets
  • Stocks
  • Trading
  • Home
  • Business
  • Financial Planning
  • Personal Finance
  • Investing
  • Money
  • Economy
  • Markets
  • Stocks
  • Trading
No Result
View All Result
FeeOnlyNews.com
No Result
View All Result
Home Investing

Dividend Kings In Focus: Fortis

by FeeOnlyNews.com
4 months ago
in Investing
Reading Time: 7 mins read
A A
0
Dividend Kings In Focus: Fortis
Share on FacebookShare on TwitterShare on LInkedIn


Updated on July 8th, 2025 by Felix Martinez

The Dividend Kings are an illustrious group of companies. These companies stand apart from the vast majority of the market as they have raised dividends for at least 50 consecutive years.

We believe that investors should view the Dividend Kings as the highest-quality dividend growth stocks to buy for the long term.

With this in mind, we created a full list of all the Dividend Kings.

You can download the full list, along with important financial metrics such as dividend yields and price-to-earnings ratios, by clicking the link below:

 

Dividend Kings In Focus: Fortis

This group is so exclusive that there are only 55 companies that qualify as Dividend Kings. Fortis Inc. (FTS) recently raised its dividend for the 51st consecutive year, joining the list of Dividend Kings.

This article will provide an overview of the company’s business, its growth prospects, competitive advantages, and expected returns.

Business Overview

Fortis is Canada’s largest investor-owned utility business with operations in Canada, the United States, and the Caribbean. It is cross-listed in Toronto and New York.

Fortis trades with a current after-tax yield of 3.7% (about 4.3% before the 15% withholding tax applied by the Canadian government). Unless otherwise noted, US$ is used in this research report.

Fortis currently has 99% regulated assets: 82% regulated electric and 17% regulated gas. Approximately 64% are in the U.S., 33% in Canada, and 3% in the Caribbean.

Source: Investor Presentation

Fortis Inc. reported Q1 2025 net earnings of $499 million ($1.00 per share), up 8.7% from $459 million ($0.93 per share) in Q1 2024. Revenue rose 7.1% to $3.338 billion, driven by rate base growth and a stronger U.S. dollar (1.43 vs. 1.35). Operating cash flow increased 57.9% to $1.213 billion. Capital expenditures grew 25.9% to $1.420 billion, supporting a $5.2 billion 2025 plan.

Segment earnings: ITC $150 million (+8.7%), UNS Energy $81 million (-8.0%), Central Hudson $65 million (+75.7%), FortisBC Energy $156 million (+6.8%), FortisAlberta $37 million (-17.8%), FortisBC Electric $21 million (+5.0%), Other Electric $42 million (+23.5%). Corporate and Other loss widened to $53 million from $49 million.

Fortis maintained its $26.0 billion capital plan for 2025–2029, targeting a 6.5% rate base growth to $53.0 billion. Dividend guidance of 4–6% annual growth through 2029 was reaffirmed, with a Q1 dividend of $0.615 per share (+4.2%). CEO David Hutchens highlighted the operational strength and tariff resilience, supporting growth and a 50% reduction in GHG emissions by 2030.

Growth Prospects

Utility companies are typically classified as slow, but steady growers. Indeed, we expect Fortis to grow its earnings per share by 5.5% annually over the next five years. This growth will be driven by multiple factors.

After releasing its five-year capital plan of CAD$26 billion (roughly $18.7 billion in U.S. dollars) for 2025 to 2029, which suggests a mid-year rate base growth at a compound annual growth rate of ~6.5%. The company also maintained its dividend growth guidance of 4% to 6% through 2029.

Source: Investor Presentation

The capital plan includes investing in areas such as a greener and more efficient grid and a shift from fossil fuels to solar and wind generation. Importantly, this growth rate is before the impact of acquisitions, which have historically been important for Fortis.

Competitive Advantages & Recession Performance

Utility companies often benefit from multiple advantages. The first is that they usually operate in a near-monopoly on the areas that they service.

Because demand for Fortis’s utility services remains relatively stable across various economic environments, Fortis’s results have been relatively resilient in the face of economic uncertainties, including the current one, where inflation and interest rates are higher than in recent history.

Additionally, Fortis is unique due to its cross-border exposure. Its timely U.S. acquisitions of regulated utilities since 2013 have allowed Fortis to generate more than half of its revenue from that country.

Given these built-in advantages, many utilities often outperform other sectors of the market during recessions. Below are the company’s earnings-per-share results during and after the Great Recession:

2007 earnings-per-share: $1.32
2008 earnings-per-share: $1.52 (15% increase)
2009 earnings-per-share: $1.51 (~1% decrease)
2010 earnings-per-share: $1.81 (20% increase)

The company grew its diluted earnings per share in 2008, followed by a minor decline in 2009, which was the worst year of the recession. Fortis then quickly rebounded with 20% earnings growth in 2010.

Valuation & Expected Total Returns

We expect Fortis to generate earnings per share of US$2.44 in 2025. At the current share price, FTS stock trades for a price-to-earnings ratio of 19.2.

Given the company’s stable business model, we believe fair value is 19 times earnings, which is close to the average valuation of the stock for the last five years.

Reverting to our target valuation by 2030 would result in a multiple compression, reducing annual returns by 0.3%. In addition, we expect annual EPS growth of 5.5% which will also contribute to shareholder returns.

Finally, dividends will boost returns as FTS stock currently yields 3.9%.

Source: Investor Presentation

FTS has now raised its dividend for 51 consecutive years. Fortis’ payout ratio has traditionally been about 70% of earnings. The dividend is important to management, and we believe it is safe and is expected to continue rising for years to come.

Therefore, FTS is expected to return an average of 10.1% per year through 2029. An expected return above 9.1% qualifies FTS stock as a hold.

Final Thoughts

There is much to like about Fortis, including its recession-proof business model, the high success rate of rate increase approvals, and its long history of dividend growth. Only the most well-run businesses can pay dividends for as long as Fortis has.

Shares of Fortis appear reasonably valued. The company should continue to grow its earnings and, consequently, its dividends for many years. With an expected return of slightly more than 9%, the stock is a hold.

Additional Reading

The following articles contain stocks with very long dividend or corporate histories, ripe for selection for dividend growth investors:

Thanks for reading this article. Please send any feedback, corrections, or questions to [email protected].



Source link

Tags: dividendFocusFortisKings
ShareTweetShare
Previous Post

Pump.fun secures $500M in public sale; PUMP token jumps in pre-market trading

Next Post

Jim Cramer Reiterates $200 PT for Palantir

Related Posts

High Dividend 50: Cross Timbers Royalty Trust

High Dividend 50: Cross Timbers Royalty Trust

by FeeOnlyNews.com
October 30, 2025
0

Published on October 28th, 2025 by Felix Martinez High-yield stocks pay out dividends that are significantly higher than the market...

The Factor Mirage: How Quant Models Go Wrong

The Factor Mirage: How Quant Models Go Wrong

by FeeOnlyNews.com
October 30, 2025
0

Factor investing promised to bring scientific precision to markets by explaining why some stocks outperform. Yet after years of underwhelming...

The Best Long-Term Rental Markets According to the Data (and Common Sense)

The Best Long-Term Rental Markets According to the Data (and Common Sense)

by FeeOnlyNews.com
October 29, 2025
0

In This Article We all love hearing about “hot” markets, but by the time they’re called hot, they’re already cooling...

Private Equity’s New Exit Playbook

Private Equity’s New Exit Playbook

by FeeOnlyNews.com
October 29, 2025
0

Private equity (PE) exit strategies have adapted and evolved past the days of smooth IPO runways and quick M&A turnarounds...

Now He’s Saying to Buy

Now He’s Saying to Buy

by FeeOnlyNews.com
October 29, 2025
0

Brian Burke is one of the most revered minds in real estate investing. Almost nobody has done what he has—purchased...

The 10 Cheapest Dividend Kings Trading Below Fair Value

The 10 Cheapest Dividend Kings Trading Below Fair Value

by FeeOnlyNews.com
October 28, 2025
0

Published on October 28th, 2025 by Bob Ciura Most investors focus primarily on the growth prospects of stocks in order...

Next Post
Jim Cramer Reiterates 0 PT for Palantir

Jim Cramer Reiterates $200 PT for Palantir

Democrats declare ‘Anti-Crypto Corruption Week’ to counter GOP crypto bills

Democrats declare 'Anti-Crypto Corruption Week' to counter GOP crypto bills

  • Trending
  • Comments
  • Latest
AB Infrabuild, among 5 cos to approach record date for stock splits. Last day to buy for eligibility

AB Infrabuild, among 5 cos to approach record date for stock splits. Last day to buy for eligibility

October 15, 2025
Housing Market Loses Steam, “National Buyer’s Market” Likely in 2026

Housing Market Loses Steam, “National Buyer’s Market” Likely in 2026

October 14, 2025
Are You Losing Out Because of Medicare Open Enrollment Mistakes?

Are You Losing Out Because of Medicare Open Enrollment Mistakes?

October 13, 2025
Coinbase boosts investment in India’s CoinDCX, valuing exchange at .45B

Coinbase boosts investment in India’s CoinDCX, valuing exchange at $2.45B

October 15, 2025
Government shutdown could drain financial advisor optimism

Government shutdown could drain financial advisor optimism

October 7, 2025
Getting Started: How to Register

Getting Started: How to Register

October 10, 2025
Trump cuts fentanyl tariffs on China to 10% as Beijing delays rare earth curbs

Trump cuts fentanyl tariffs on China to 10% as Beijing delays rare earth curbs

0
Canary Funds updates S-1 filing for XRP spot ETF, targeting November 13 launch

Canary Funds updates S-1 filing for XRP spot ETF, targeting November 13 launch

0
Powell forced to stave off uprisings in markets and on his own Fed board as his term ends

Powell forced to stave off uprisings in markets and on his own Fed board as his term ends

0
India to approve deals worth .7b for Israeli defense missiles

India to approve deals worth $3.7b for Israeli defense missiles

0
High Dividend 50: Cross Timbers Royalty Trust

High Dividend 50: Cross Timbers Royalty Trust

0
5 Things to Know About the Harbor Freight Credit Card

5 Things to Know About the Harbor Freight Credit Card

0
Canary Funds updates S-1 filing for XRP spot ETF, targeting November 13 launch

Canary Funds updates S-1 filing for XRP spot ETF, targeting November 13 launch

October 30, 2025
Powell forced to stave off uprisings in markets and on his own Fed board as his term ends

Powell forced to stave off uprisings in markets and on his own Fed board as his term ends

October 30, 2025
Trump cuts fentanyl tariffs on China to 10% as Beijing delays rare earth curbs

Trump cuts fentanyl tariffs on China to 10% as Beijing delays rare earth curbs

October 30, 2025
5 Things to Know About the Harbor Freight Credit Card

5 Things to Know About the Harbor Freight Credit Card

October 30, 2025
Undiscovered AI Stock Delivers Staggering Returns, Outperforming Tech Titans

Undiscovered AI Stock Delivers Staggering Returns, Outperforming Tech Titans

October 30, 2025
Amazon Earnings Preview: Layoffs Mark the Start of AI-Era Efficiency Drive

Amazon Earnings Preview: Layoffs Mark the Start of AI-Era Efficiency Drive

October 30, 2025
FeeOnlyNews.com

Get the latest news and follow the coverage of Business & Financial News, Stock Market Updates, Analysis, and more from the trusted sources.

CATEGORIES

  • Business
  • Cryptocurrency
  • Economy
  • Financial Planning
  • Investing
  • Market Analysis
  • Markets
  • Money
  • Personal Finance
  • Startups
  • Stock Market
  • Trading

LATEST UPDATES

  • Canary Funds updates S-1 filing for XRP spot ETF, targeting November 13 launch
  • Powell forced to stave off uprisings in markets and on his own Fed board as his term ends
  • Trump cuts fentanyl tariffs on China to 10% as Beijing delays rare earth curbs
  • Our Great Privacy Policy
  • Terms of Use, Legal Notices & Disclaimers
  • About Us
  • Contact Us

Copyright © 2022-2024 All Rights Reserved
See articles for original source and related links to external sites.

Welcome Back!

Sign In with Facebook
Sign In with Google
Sign In with Linked In
OR

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
No Result
View All Result
  • Home
  • Business
  • Financial Planning
  • Personal Finance
  • Investing
  • Money
  • Economy
  • Markets
  • Stocks
  • Trading

Copyright © 2022-2024 All Rights Reserved
See articles for original source and related links to external sites.