Utility stocks remain a cornerstone of any well-diversified investment portfolio, offering steady dividends and reliable growth potential. Here's a detailed analysis of the top utility stocks in Canada for February 2025.
What are Utility Stocks?
Utility stocks represent companies that provide essential services like electricity, natural gas, and water. These companies typically operate in regulated markets, offering stable cash flows and consistent dividend payments, making them attractive for income-focused investors.
Best Utility Stocks in Canada This Month (February 2025)
These selections are based on financial stability, dividend history, and growth potential.
1. Fortis Inc. (TSX:FTS)
Fortis stands as Canada's premier utility company, serving over 3.4 million customers across North America.
- Price: $57.35
- P/E Ratio: 19.46
- Dividend Yield: 3.95%
The company's regulated business model and extensive infrastructure investments provide exceptional stability and growth potential.
2. Emera Inc. (TSX:EMA)
- Price: $55.33
- P/E Ratio: 13.11
- Dividend Yield: 4.99%
Emera's strategic focus on renewable energy and strong presence in the Florida market positions it well for future growth.
3. Hydro One Limited (TSX:H)
- Price: $39.94
- P/E Ratio: 32.42
- Dividend Yield: 4.52%
As Ontario's largest electricity transmission and distribution company, Hydro One benefits from a strong regulatory framework and stable revenue streams.
4. Canadian Utilities Limited (TSX:CU)
- Price: $36.12
- P/E Ratio: 15.70
- Dividend Yield: 4.97%
Canadian Utilities boasts the longest track record of annual dividend increases among Canadian publicly traded companies.
5. AltaGas Ltd. (TSX:ALA)
- Price: $24.70
- P/E Ratio: 14.42
- Dividend Yield: 4.53%
AltaGas combines utility operations with midstream assets, offering a unique mix of stability and growth potential.
Summary of the Best Utility Stocks in Canada This Month (February 2025)
| Stock | Ticker Symbol | Current Price | Dividend Yield |
|---|---|---|---|
| Fortis Inc. | TSX:FTS | $57.35 | 3.95% |
| Emera Inc. | TSX:EMA | $55.33 | 4.99% |
| Hydro One Limited | TSX:H | $39.94 | 4.52% |
| Canadian Utilities | TSX:CU | $36.12 | 4.97% |
| AltaGas Ltd. | TSX:ALA | $24.70 | 4.53% |
Final Words
Canadian utility stocks continue to offer attractive investment opportunities in 2025, combining reliable dividends with steady growth potential. While interest rates and market conditions may create short-term volatility, the defensive nature and essential services provided by these companies make them valuable additions to long-term investment portfolios.
Related Articles
Frequently Asked Questions About Canadian Utility Stocks
Why invest in utility stocks?
Utility stocks offer stable returns, consistent dividends, and relatively low volatility due to their regulated business models and essential services. They're particularly attractive for income-focused investors and those seeking defensive investments.
How do interest rates affect utility stocks?
Utility stocks are typically sensitive to interest rate changes because they carry significant debt. When rates rise, their borrowing costs increase, which can impact profitability. However, their regulated nature often allows them to pass these costs on to consumers.
What is a good dividend yield for utility stocks?
For Canadian utility stocks, dividend yields typically range from 3.5% to 5.5%. However, it's important to consider dividend growth history and payout ratio alongside the yield. A sustainable dividend yield with consistent growth is often more valuable than a higher yield that might be at risk.
