Why Fortis Inc. Will Remain a Dividend King for Decades to Come

The art of investing in equities for yield (often referred to as income investing) is a tricky one. Equities which pay relatively decent dividend yields, and those that tend to increase their dividend distributions over time, are often viewed as bond proxies.

As such, these equities typically take on many of the same characteristics as bonds, including but not limited to sensitivity to interest rates and inverse correlation with many other equity sub sectors, factors which have both positive and negative ramifications for long term investors.

I believe companies like Fortis Inc. (TSX:FTS)(NYSE:FTS) will continue to outperform many of the other bond proxies out there on the Canadian stock market for a number of key reasons. In terms of diversification,

Fortis has expanded its geographical footprint significantly, primarily in the U.S. market, in recent years at prices which were quite favorable, given the currency spread which was paid at the time which was near-zero (when the Canadian and U.S. dollar were trading around par).

Additionally, Fortis has remained one of the penultimate dividend growers on the TSX, growing the company's dividend each year for nearly 45 years!

Income growth over four and a half decades is nothing to sneeze at, and when considering the company's ability to continue to grow earnings for shareholders over time and maintain a reasonable dividend payout ratio, expectations that such increases will continue indefinitely should excite even the most bearish cynic.

Invest wisely, my friends.