"Fortis' (TSE:FTS) Investors Rejoice: 49% Return in 5 Years!"

Ladies and gentlemen, listen up! Fortis (TSE:FTS) has been on a tear, delivering a whopping 49% return over the past five years. This is a stock that has been a steady performer, and it's time to take notice. Let's dive into what's been driving this utility giant and why you should consider adding it to your portfolio.



First things first, interest rates have been the big driver here. In 2022 and 2023, the Bank of Canada and the U.S. Federal Reserve jacked up interest rates to tame inflation. Higher rates mean higher borrowing costs, and that's a headache for companies like Fortis that rely on debt to fund their massive capital projects. But here's the kicker: when rates started to fall in the second half of 2024, Fortis' stock took off like a rocket. Falling rates mean cheaper borrowing, and that's music to the ears of utility stocks.

Now, let's talk about Fortis' capital program. The company is pouring $26 billion into new projects, aiming to boost its rate base from $39 billion in 2024 to $53 billion by 2029. As these new assets come online, cash flow is expected to surge, supporting annual dividend increases of 4% to 6%. Fortis has a 51-year streak of dividend increases, so you can count on that income stream.

But hold on, there are risks. The U.S. Federal Reserve might put rate cuts on hold or even raise rates again if jobs data stays strong and inflation remains sticky. In Canada, the Bank of Canada might slow rate cuts if the U.S. does. This uncertainty has caused Fortis' share price to pull back recently, but don't let that scare you. This is a buying opportunity!



Fortis' dividend yield of 4.2% is nothing to sneeze at. It's competitive with other utility stocks and offers a steady income stream. Plus, with the company's capital program and strategic acquisitions, there's potential for future growth. This is a no-brainer for income investors looking to bolster their TFSA or RRSP portfolios.

So, what's the game plan? First, diversify your portfolio to mitigate interest rate risks. Second, consider dollar-cost averaging to take advantage of near-term volatility. Third, focus on Fortis' attractive dividend yield and growth prospects. Fourth, keep an eye on economic indicators that could influence interest rates. And finally, take a long-term view. Fortis' capital program and strategic acquisitions will drive growth and support dividend increases.

Don't miss out on this opportunity, folks! Fortis is a solid pick for income investors, and with the right strategy, you can capitalize on its growth prospects while mitigating risks. So, what are you waiting for? Get in the game and add Fortis to your portfolio today!