Canadian Utilities Offer a 3.8% Yield As Well As Top-Tier Income Security

Canadian Utilities’ high quality, regulated asset base which generates predictable, and recession-resistant cash flows are the center of this primary investment thesis. Regulated utilities account for nearly the entire operating earnings profile and this protects capital from commodity price volatility. It also provides reliable inflation-hedged adjustments across international jurisdictions like Australia.

Furthermore, the company boasts the longest unbroken record of consecutive annual dividend increases among Canadian publicly traded companies, spanning over 50 years. With an extensive capital program fueling steady rate-base expansion, the company provides conservative income-focused investors with defensive growth and reliable dividend compounding.

The stock trades at 19.5 times the company’s forward earnings forecast. That’s justified given the defensive characteristics, regulatory visibility, and resilient balance sheet.

Canadian Utilities Ltd. (Toronto symbol CU; www.canadianutilities.com) distributes electricity and natural gas in Alberta and Australia. It also owns or invests in power plants in Canada, Mexico, Australia and Chile. ATCO Ltd. (Toronto symbol ACO.X) owns 52.5% of the firm.

Canadian Utilities recently started up the Central East Transfer-Out (CETO) transmission line, which modernized and expanded the capacity of the power system in central Alberta. The company spent $255 million on this project.

In addition, Canadian Utilities has started building the 230-kilometre Yellowhead Mainline pipeline, which will pump natural gas from Edmonton to Fort Saskatchewan, just northeast of the city. This project will cost $2.9 billion and should begin operating by the end of 2027. Industrial customers have already reserved 100% of the pipeline’s capacity. That cuts the risk of this investment.
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Canadian Utilities’ new projects are a big part of improved results

The company’s revenue in the quarter ended June 30, 2026, rose 8.6%, to $914 million from $842 million a year earlier. That gain is mainly due to higher customer rates and new projects.

Earnings before unusual items also improved 2.5%, to $140 million, or $0.51 a share, from $121 million, or $0.45 a share.

For all of 2026, Canadian Utilities’ earnings will probably rise 7%, to $2.59 a share and the stock trades at a reasonable 19.5 times that estimate. Its new projects will also let Canadian Utilities keep raising your dividend. The current annual rate of $1.849 a share yields 3.8%.

Recommendation in Dividend Advisor: Canadian Utilities Ltd. is a buy.

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Jim Bates

Jim is an associate editor at TSI Network. He is the lead reporter and analyst for The Successful Investor and Wall Street Stock Forecaster and a member of the Investment Planning Committee. Jim has held the Chartered Financial Analyst designation since 1992 and spent more than a decade at the Financial Post DataGroup before joining TSI Network. He has a Bachelor of Commerce degree from the University of Toronto.

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