Fortis (TSX: FTS) has demonstrated strong performance on the TSX over the past year, as evidenced by its stock chart. Despite its notable run and a valuation of 19 times earnings, some investors may hesitate to invest in Fortis, viewing it solely as a dividend proxy that may not offer value at its current levels.
However, I believe Fortis is a top dividend stock to consider for several reasons. Firstly, Fortis operates within the utilities sector, which is experiencing renewed interest due to the increasing demand for electricity in an AI-driven economy. As a leading provider of electricity and natural gas in Canada, the U.S., and the Caribbean, Fortis is well-positioned to benefit from these long-term industry trends, supported by its regulated utilities model that ensures stable cash flow.
Additionally, Fortis offers a solid dividend yield of 3.6%, which is attractive compared to current bond yields. With a track record of consistently increasing its dividend for over 50 years and strong earnings growth, Fortis is recognized as a dividend king that is likely to sustain its dividend growth in the future.
In conclusion, Fortis remains a compelling investment opportunity for dividend investors seeking reliable passive income. Given its strong performance and favorable industry trends, Fortis is a stock worth considering for long-term ownership, with potential for continued dividend growth in the years ahead.
