Fortis (TSX:FTS)(NYSE:FTS), a key player in the North American regulated electric and gas utility sector, recently unveiled its ambitious 2024-2028 outlook while announcing another dividend hike as well.
The company announced a five-year capital plan of $25 billion, which is an increase of $2.7 billion from its previous plan. The new capital plan is the largest ever for Fortis. David Hutchens, President and CEO of Fortis, emphasized how investing in future growth can also lead to more dividend increases. "Our sustainable regulated growth strategy is focused on delivering cleaner energy that remains affordable and reliable for our customers while supporting annual dividend growth of 4-6% through 2028.”
Along with the news of the capital plans, Fortis announced that it would raising its dividend by 4.4%. It’s a significant milestone for the company because it marks the 50th consecutive year that Fortis has raised its dividend. It’s only the second company on the Toronto Stock Exchange to have a streak that long. With the increase, the stock now yields 4.3%.
The company's robust capital plan, focus on cleaner energy, and consistent dividend growth make Fortis an attractive option for investors seeking both stability and growth. At 18 times earnings, it’s also not an expensive stock to own.
Year to date, however, it has been a pretty underwhelming investment as its returns are flat. But if your main objective is to collect a high dividend, Fortis can make for a good investment to add to your portfolio. Not only does it pay a high dividend today, but that recurring income is likely to increase in the future.