Fortis Inc. (FTS.TO, FTS.N) is gaining traction among investors as a compelling long-term holding, driven by its robust capital investment plan and consistent dividend growth. The company’s strategic positioning in North American utility markets underscores its resilience in volatile economic environments.
- Fortis Inc. has a $17.5 billion capital expenditure plan through 2027, with 60% dedicated to grid modernization and renewables.
- Expected annual rate base growth of 5.5% to 6.5% supports ongoing regulated rate increases.
- 2026 projected adjusted EPS of CAD 3.45, up 6.2% year-over-year.
- Dividend payout ratio remains at 72%, with a current yield of 4.1%.
- Forward P/E of 16.8, below the sector average of 18.5, indicating valuation appeal.
- Net debt-to-EBITDA ratio of 3.4x, reflecting strong financial resilience.
Fortis Inc. (FTS.TO, FTS.N) is advancing a strong bull case rooted in its disciplined capital allocation and expanding infrastructure footprint across the U.S. and Canada. The company has announced a $17.5 billion capital expenditure plan through 2027, with over 60% allocated to grid modernization and renewable energy integration, positioning it to benefit from long-term decarbonization trends. This investment pipeline supports an expected annual rate base growth of 5.5% to 6.5%, which directly correlates with regulated rate increases and earnings stability. The company’s financial profile remains resilient, with a projected 2026 adjusted earnings per share of CAD 3.45, representing a 6.2% year-over-year increase. Its dividend payout ratio has been maintained at approximately 72%, well below the 80% threshold that typically triggers investor concern. Fortis has delivered 23 consecutive years of dividend growth, reinforcing its status as a defensive equity with a yield of 4.1% as of February 2026. Market reactions reflect growing confidence, with FTS.TO trading at a 12-month forward P/E of 16.8, below the sector average of 18.5 for North American utilities. Analysts tracking the stock note that the company’s low net debt-to-EBITDA ratio of 3.4x enhances financial flexibility amid rising interest rates. These metrics suggest a margin of safety for long-term shareholders. Investors in Canadian equities and income-focused portfolios are increasingly viewing Fortis as a core holding, particularly given its exposure to regulated markets with predictable cash flows. The stock’s performance in 2025, which outpaced the S&P/TSX Utilities Index by 4.3 percentage points, further validates its momentum.