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Utilities are the stock market’s equivalent of balancing a cheque book – boring but necessary. Necessary because these stocks should be among the basic holdings of a well-designed income portfolio. Boring because they rarely deliver much in the way of capital gains. They just lie around and send money every three months.
If you like your risk in low doses, that’s just fine. Steady cash flow with limited downside works well for conservative investors.
What makes this possible is regulation. The main business of utility stocks is to deliver basic necessities to consumers, such as electricity and natural gas. This gives them monopoly status within the regions in which they operate, so regulatory bodies have the task of setting the prices they charge. That means walking a fine line between corporate profits and consumer interests. The net result is usually a small annual rate increase, which translates into modest growth.
That doesn’t mean the prices of these stocks don’t change. Utilities are interest-rate sensitive – when rates rise, it puts downward pressure on their share prices. Falling rates have the opposite effect.
Currently, it appears we’re moving into a period of central bank easing, which many economists believe will continue into 2026. That’s helped to boost the S&P/TSX Capped Utilities Index by 19.83% so far this year. That’s less than the S&P/TSX Composite, but it’s a big move for this equity class.
Here’s a look at three utilities that I track in my Income Investor newsletter.
Canadian Utilities (TSX: CU) is based in Calgary. Its operations include electricity generation, transmission, and distribution, and natural gas transmission, distribution, and infrastructure development. It also provides energy storage and industrial water solutions and has been heavily investing in green energy projects for over 20 years.
The stock price has gradually moved higher this year and is up about 15% year to date.
The company reported second-quarter adjusted earnings of $121 million ($0.45 per share). That compares with $117 million ($0.43 per share) in the same quarter of 2024.
Canadian Utilities invested $382 million in capital expenditures in the quarter, of which 95% was spent on regulated utilities in ATCO Energy Systems and ATCO Australia.
The stock pays a quarterly dividend of $0.4577 a share ($1.83 per year). The company has raised its dividend every year for the past half-century.
Fortis Inc. (TSX: FTS) is a leader in the North American regulated electric and gas utility industry, with 2024 revenue of $12 billion and total assets of $73 billion as of June 30, 2025. The corporation has 9,800 employees and serves utility customers in five Canadian provinces, ten U.S. states, and three Caribbean countries.
The corporation reported second-quarter net earnings attributable to shareholders of $384 million ($0.76 per share). That represented an increase of $53 million ($0.09 per share) compared with the second quarter of 2024. The increase was driven by rate-base growth across its utilities, including earnings associated with FortisBC Energy’s investment in the Eagle Mountain Pipeline project, as well as higher earnings at Central Hudson due to the reset of revenue requirement effective July 1, 2024, and the timing of operating expenses in 2025. The higher U.S. dollar-to-Canadian dollar exchange rate also favourably impacted results.
On a year-to-date basis, net earnings were $883 million ($1.76 per share), an increase of $93 million, or $0.16 per share, compared with the same period in 2024.
The share price has been moving steadily higher and recently hit an all-time high of $72.56. As of the time of writing, the share price had increased by almost 21% year-to-date.
Emera Inc. (TSX: EMA) is a Halifax-based utility with electricity and natural gas operations in Nova Scotia, the U.S., and the Caribbean. It provides services to about 2.6 million customers.
Emera has been one of the sector’s top performers this year, with the shares up 25% so far in 2025.
The company reported a strong second-quarter with adjusted net income of $236 million ($0.79 per share), compared with $151 million ($0.53 per share) in the same period of 2024. The increase was primarily due to increased earnings at Tampa Electric, Emera Energy Services, and New Mexico Gas Company, and lower corporate costs.
Year-to-date adjusted net income was $615 million ($2.07 per share), compared with $367 million ($1.28 per share) for the first six months of 2024.
In September, Emera announced a small 1% increase to its quarterly dividend, bringing it to $0.7325 per share ($2.93 a year). It marks the 19th consecutive year the company has increased its payout.
The company said it remains committed to its 5% to 7% annual average adjusted EPS growth guidance through 2027 and 7% to 8% forecasted rate base growth through 2029.
If interest rates continue to fall, all three companies should see an increase in their share prices. But that will reverse when rates start to rise again. I suggest looking at these stocks strictly for income purposes. They should be steady performers over the long haul. Consult with your financial adviser before investing to ensure the investment aligns with your financial objectives and risk-tolerance.
Gordon Pape is one of Canada’s best-known personal finance commentators and investment experts. He is the publisher of The Internet Wealth Builder and The Income Investor newsletters, which are available through the Building Wealth website.
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Notes and Disclaimer
Content © 2025 by Gordon Pape Enterprises. All rights reserved. Reprinted with permission. The foregoing is for general information purposes only and is the opinion of the writer. Securities mentioned carry risk of loss, and no guarantee of performance is made or implied. This information is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting, or tax advice. Always seek advice from your own financial advisor before making investment decisions.
Image: iStock.com/PaulPaladin
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