3 Canadian Utility Stocks With Stable Returns (and Dividends, Too!)

the S&P/TSX Fixed Utilities Index decreased almost a full percentage point in early afternoon trading on Tuesday, July 18. Today, I want to target the three main Canadian utility stocks that have provided strong returns recently years. These equities are also reliable dividend stocks. Let’s dive in.

This utility stock is on track to become another Dividend King

Fortis (TSX:FTS) is a utility holding company based in St. Shares of this utility stock are down 1.5% month over month at the time of this writing. The stock is very low until 2023.

This company released its first quarter (Q1) fiscal 2023 earnings on May 3. Fortis reported adjusted net earnings per share (EPS) of $0.91 – up from $0.78 in Q1 2022. Meanwhile, it saw capital expenditures of $1.0 billion, keeping it on track to reach $4.3 billion for the full year. That five-year capital plan aims to dramatically grow Fortis’ rate through 2027. The stock has delivered 49 consecutive years of dividend growth, putting it one year away from the dividend crown.

Shares of this utility stock currently have a favorable price-to-earnings (P/E) ratio of 18. Fortis offers a quarterly dividend of $0.565 per share. That represents a solid 4% yield.

Why Emera is a strong target in July

Emera (TSX:EMA) is a Halifax-based energy and services company engaged in the generation, transmission, and distribution of electricity to a variety of customers. This utility stock is down 1.4% in the past month. Its shares are up 1.4% in the year-to-date period.

In Q1 2023, the company reported adjusted net income of $268 million, or $0.99 per common share – up from $242 million, or $0.92 per common share, in Q1 2022. Emera management is pleased with the strong start to the 2023 fiscal year. The company is also pursuing a multi-billion-dollar capital plan focused on strengthening its bottom line and supporting strong dividend growth for years to come.

This utility stock ultimately has an attractive P/E ratio of 12. Emera has delivered 16 consecutive years of dividend growth, making it a leading Canadian Dividend Aristocrat. It currently offers a quarterly distribution of $0.69, which represents a solid 5.1% yield.

Another reliable utility stock I’ll be picking up today

Hydro One (TSX:H) is the third and final utility stock I’m looking to acquire in the second half of July 2023. This Toronto-based power transmission and distribution company made its debut on the TSX Index back in 2015 Shares of Hydro One jumped 2.4% monthly at the time of writing. The stock is up 1.3% year to date in 2023.

This company revealed its Q1 2023 earnings on May 5. Hydro One posted earnings of $2.07 billion – up from $2.04 billion last year. Meanwhile, higher costs of operation, maintenance, and administration led to a decline in profits. Regardless, Hydro One is a profit machine that investors can count on for the long term.

Shares of this utility stock have a solid P/E ratio of 22. It offers a quarterly dividend of $0.296 per share, representing a 3.1% yield.