To Build a Steady Income Portfolio, These 3 Canadian Utility Stocks Belong on Your Radar

If your goal is to build a portfolio that can keep paying you through recessions, rate cycles, and market freakouts, utility stocks deserve a serious look.

These companies sell an essential service, earn regulated returns, and usually have a built-in path to grow through rate base spending. That mix can support dividends through rough markets and still deliver long-term total returns, especially when data centres keep pushing more demand onto the grid. What’s more, they usually offer stellar dividends. So let’s look at solid options on the TSX today.

EMA

Emera (TSX:EMA) owns regulated electric and gas utilities, with big operations tied to Tampa Electric and Nova Scotia Power. Over the last year, the story has leaned into capital investment and reliability work, plus the steady grind of regulatory filings that let it earn an allowed return. Investors have also watched execution in Florida and Atlantic Canada, because those jurisdictions drive much of the “steady growth” narrative.

On earnings, 2025 adjusted earnings per share (EPS) came in at $3.49, up 19% year over year, while adjusted net income topped $1 billion for the first time in its history. Fourth-quarter reported net income was $68 million, or $0.23 per share, while adjusted net income was $167 million, or $0.55 per share, reflecting the usual utility mix of one-time items and timing swings. The stock trades around 19 times trailing earnings and yields roughly 4% on a trailing basis continuing a core model built for consistency.

H

Hydro One (TSX:H) is Ontario’s transmission and distribution backbone, and that makes it a classic “sleep at night” utility when markets get choppy. Over the last year, the utility stock stayed focused on grid investment, storm resiliency, and efficiency gains, while operating inside a regulated framework that rewards steady execution. It does not need a booming economy to stay relevant. Ontario still needs power moved safely and reliably every day.

In the fourth quarter of 2025, Hydro One reported basic EPS of $0.39, up from $0.33 a year earlier. For full-year 2025, it reported net income attributable to common shareholders of $1.339 billion and EPS of $2.23, up from $1.93 in 2024. Valuation sits near 25 times trailing earnings, and the trailing dividend yield sits around 2.3%. That yield is not the biggest in the group, but the trade-off is steadier dividend coverage, with a payout ratio around 59%.

CU

Canadian Utilities (TSX:CU) feels like an old-school dividend name for a reason. It operates utility and energy infrastructure assets, with regulated operations that can support a long dividend history. Over the last year, investors have kept an eye on portfolio simplification and the way the business balances regulated growth with cost pressures. It also keeps doing the thing that made it famous in the first place: paying the dividend through just about anything.

The most recent disclosed quarterly detail showed third-quarter 2025 adjusted earnings of $108 million, or $0.40 per share, up from $0.38 per share in the prior-year quarter. It also declared a quarterly dividend of $0.4577 per share, which works out to about $1.83 annualized. The utility stock trades around 24 times trailing earnings and yields roughly 3.8% to 3.9% on a trailing basis, but the payout ratio screens high, around the low 90% range.

Canadian Utilities is a smart pick for investors who prize dividend history above all else. But just go in knowing that the high payout ratio means the company needs to keep delivering good results for the dividend to stay consistent.

Bottom line

These three utilities give you different flavours of “steady,” and choosing the right one for you depends on what you’re looking for.

Emera offers a stronger yield with a clear regulated growth plan, Hydro One offers a lower yield but tighter dividend coverage and a core grid moat, and Canadian Utilities offers a long dividend history with a yield that still looks competitive, even as the current payout ratio is something to keep an eye on.

In fact, here’s what $7,000 in each can bring.

COMPANYRECENT PRICENUMBER OF SHARES YOU CAN BUY WITH $7,000ANNUAL DIVIDENDTOTAL ANNUAL PAYOUT ON A $7,000 INVESTMENTPAYOUT
FREQUENCYEMA$70.00100$2.92$292.00QuarterlyH$57.88120$1.33$159.60QuarterlyCU$48.30144$1.84$264.96Monthly

The key to investing in any utility is go in with realistic expectations. They can be excellent compounding machines, but the best results come from patience. If that’s the kind of investing you want to do more of, Stock Advisor Canada makes two recommendations each month. It’s designed for Foolish investors who think in years, not quarters.

The post To Build a Steady Income Portfolio, These 3 Canadian Utility Stocks Belong on Your Radar appeared first on The Motley Fool Canada.

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More reading

• Feeling Uneasy About Markets? These 3 Canadian Dividend Stocks Are Built for Times Like These
• 2 Canadian Dividend Stocks Every Investor Should Consider Owning
• A Smart TFSA Portfolio for 2026: 3 Stocks I’d Buy Now
• 5 TSX Dividend Stocks I’d Jump to Buy When the TSX Pulls Back
• The Top 3 Dividend Stocks I’d Tell Anyone to Buy

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