Fortis Delivers Solid Q1 as Regulated Growth Drives Earnings

Canadian utility giant Fortis Inc. (TSX:FTS)(NYSE:FTS) reported its first-quarter earnings on May 7. It was a robust start to 2025, with the company’s net earnings rising to $499 million, or $1.00 per share, up from $459 million, or $0.93 per share, a year ago. The gain was fueled by organic rate base growth across its regulated utilities, alongside a beneficial U.S.-to-Canadian dollar exchange rate. These tailwinds more than offset cost pressures including higher holding company financing expenses and weaker wholesale margins in Arizona.

Capital expenditures hit $1.4 billion in Q1, up 26% from last year, keeping Fortis aligned with its full-year target of $5.2 billion. The company reaffirmed its five-year, $26 billion capital plan, which is expected to expand its midyear rate base from $39 billion in 2024 to $53 billion by 2029. This implies a compound annual growth rate of 6.5%, which management expects to underpin dividend increases of 4–6% annually through 2029.

Fortis has been a top dividend stock to own for not only years but decades. It has increased its dividend for 51 consecutive years, making it one of the best dividend growth stocks to own on the TSX. Currently, the company pays its shareholders a quarterly dividend of $0.615, which totals $2.46 over the course of a full year. Based on its current share price, that puts its yield at around 3.6%.

To collect $1,000 in dividends from the stock, you’d have to invest approximately $27,800 given its yield. But the big incentive for investors comes from holding onto the stock over the long haul, as Fortis plans to continue to increase its dividend for the foreseeable future, which means the dividend income will become larger the longer you hang onto the stock for.

Historically, Fortis has been a fairly stable company to invest in. The company reported earnings totaling $1.6 billion last year, which showed modest growth from $1.5 billion in the previous year. The company’s profit margin is normally around 13% to 14%, which is a healthy rate and allows the business to steadily grow its bottom line as it expands its operations, enabling it to also continue growing its dividend along the way.

Fortis remains a dependable choice for dividend-focused investors seeking low-risk exposure to regulated utilities. Its steady rate base expansion, disciplined capital execution, and commitment to long-term dividend growth make it particularly suitable for income-oriented investors and retirees. The company generates a lot of consistent and recurring revenue which minimizes any surprises for its shareholders from one year to the next.

The low-volatility stock has risen 27% over the past five years. And when you include its dividend, the total returns for investors over that timeframe are 57%, signifying just how important that above-average payout is for investors, and what a difference it can make for your overall returns.

It’s also a better option than just your average utility stock. The BMO Equal Weight Utilities Index ETF, for instance, which includes Fortis along with other utility stocks, has produced five-year gains of just 14%. And when including the dividend from the ETF, the total returns are around 39%. Fortis is a big-name utility stock, and one of the best ones you can hold on to in your portfolio.