Canadian Utility Stocks Poised to Win Big in 2026

For investors seeking the right balance of passive income and slow-and-steady growth, utility stocks can be excellent investments to consider for self-directed investment portfolios. Many of the top Canadian utility players have seen share prices rise in recent years. As investors continue seeking high-quality long-term investments, this industry offers plenty of value for those who know what to look for.

Today, I will discuss two blue-chip stocks from the Canadian utility sector that you should consider adding to your holdings in 2026.

Northland Power

Northland Power Inc. (TSX:NPI) is a $4.8 billion market-cap company that develops, constructs, and operates maintainable infrastructure assets across various renewable energy facilities. The company boasts a production capacity of around 3.2 gigawatts across its network, but things have not been entirely positive for the power producer.

Following third-quarter results, the stock came under pressure as its net losses went from $191 million to $456 million from the year-ago quarter. The management also slashed dividends by 40% to strengthen its balance sheet. Operationally, the business is going strong. Its revenue in the third quarter rose by 12.8% from the same period last year.

Between improving business and its plans to invest up to $66 billion over the next five years, it can be a big winner in the long run. I would consider adding this stock to your holdings this year as a long-term investment.

Algonquin Power & Utilities

Algonquin Power & Utilities Corp. (TSX:AQN) is a stock that has been doing well of late. The $6.8 billion market-cap Canadian stock is a diversified international generation, transmission, and distribution utility company. As of this writing, AQN stock trades for $8.83 per share, up by a massive 43% in the last 12 months.

The US Federal Reserve and Bank of Canada aggressively increased interest rates in 2022 and 2023, prompting the pressure of higher borrowing costs to weigh on its financials. However, the rate hikes have made way for interest rate cuts, and things are getting better. The turnaround began early in 2025, when it sold off renewable energy assets for $2.5 billion.

The company’s management is banking on a pure-play regulated utility business model to ensure better stability and success. The approach can result in a significant boost in share prices in the coming weeks. I would recommend investing in its shares right now.

Foolish takeaway

Given their long-term growth opportunities, discounted valuations, and defensive business models, these two stocks can deliver superior long-term returns. I would add these two Canadian utility stocks to my portfolio to kick things off in 2026.

The post Canadian Utility Stocks Poised to Win Big in 2026 appeared first on The Motley Fool Canada.

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More reading

• 2 Stocks You May Want to Avoid at All Costs in 2026
• RRSP Investors: 2 TSX Dividend Stocks to Consider for 2026
• 2 Laggards With High Upside Potential on the TSX Today
• Got $14,000? Here’s a TFSA Setup That Can Pay You Every Month in 2026
• Don’t Bet Against Canada’s Top Dividend Icons Going Into the New Year

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.