A Dirt-Cheap Canadian Dividend Growth Stock Built for the Long Haul

Fortis (TSX:FTS) is a Canadian dividend growth stock that offers something unique. It’s a stock that investors can buy, hold, and almost forget about for decades. Fortis doesn’t make headlines, it doesn’t swing wildly with the market, and it doesn’t try to reinvent itself every few years.

Instead, Fortis quietly compounds and provides investors with one of the longest dividend-increase streaks in Canada. For long-term investors, that level of stability is unheard of and invaluable.

That’s especially true given the sheer amount of market volatility we’ve seen this year.

Why Fortis stands out as a long‑term dividend compounder

Fortis built its reputation on being consistent. Part of that comes thanks to the lucrative yet simple business model that Fortis adheres to. Fortis is one of Canada’s largest regulated utility stocks.

This means that the company generates almost all its earnings from regulated assets such as power lines, electric utilities and natural gas distribution. Those are essential services that cannot be replaced, nor can consumers trade down to a less expensive service. Its defensive profile makes it especially appealing during periods of market uncertainty.

In other words, Fortis operates one of the most defensive business models on the market. And that service is backed by long-term regulated contracts that span decades.

This means that, provided Fortis continues to provide utility service, it generates a recurring revenue stream. And that revenue stream is sufficient for the utility to invest in growth initiatives and pay out a quarterly dividend.

That defensive appeal and stability have helped to make Fortis a dividend growth stock like no other. Fortis has provided investors with annual increases to its dividend for an incredible 53 consecutive years. This reinforces Fortis’s position as one of the most reliable income stocks on the market.

This places Fortis into position as one of only two Dividend King stocks in Canada, and with the second-largest dividend increase streak in Canada. As of the time of writing, that yield works out to 3.3%.

For investors seeking a Canadian dividend growth stock they can depend on, Fortis continues to stand out.

How Fortis delivers dependable dividend growth year after year

The secret to Fortis’s success lies in its regulated operations. The company earns a recurring and stable revenue stream, which allows Fortis to plan its expansion over several years.

In fact, Fortis has a massive $28.8 billion capital fund extending through 2030 for that very purpose. The plan calls for annual rate base growth of 7% and supports growth investments across both infrastructure and energy transition initiatives.

As Fortis expands its asset base, its earnings and cash flows rise in a predictable manner.

This is a key point that speaks to Fortis’s aggressive stance on expansion. This is important for investors seeking a dividend growth stock to invest in, as Fortis can provide both the growth and income that long-term investors seek.

For income‑focused investors, this combination of regulated earnings and forward‑looking capital plans creates a dependable foundation for ongoing dividend increases.

Why Fortis may look cheap right now

The past several years have been difficult for capital-intensive businesses like Fortis. Higher interest rates make larger growth initiatives more expensive. It also pushes investors into fixed income, higher-yielding options such as bonds.

Fortunately, Fortis’s underlying business remains stable, and its dividend is well-covered. The company’s growth plans also remain on track.

What changed is the valuation, and this gives investors a rare chance to buy a high‑quality, stable utility at a time when volatility remains high.

Buy this dividend growth stock today

Fortis isn’t the kind of stock that will double overnight, but that’s not why investors buy it. They buy it for stability, income, and long‑term compounding.

The company’s regulated operations, disciplined capital plan, and consistent dividend growth make it a strong fit for patient investors who prioritize reliability.

For a company with Fortis’s defensive profile, predictable earnings, and multi‑decade dividend growth streak, this is the must-have dividend growth stock for any well-diversified portfolio.

The post A Dirt-Cheap Canadian Dividend Growth Stock Built for the Long Haul appeared first on The Motley Fool Canada.

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More reading

• 5 Canadian Stocks Built for Buy-and-Hold Investors
• How to Make Money in a TFSA With Dividend Stocks
• The Best Stocks to Buy With $1,000 Right Now
• 2 Exceptional Stocks for Your $7,000 TFSA Contribution in 2026
• How Much a Typical 45-Year-Old Has in TFSA and RRSP Accounts

Fool contributor Demetris Afxentiou has positions in Fortis. The Motley Fool recommends Fortis. The Motley Fool has a disclosure policy.