Why I'm Still Holding on to Canadian Utilities

A reader questions why Canadian Utilities is still included in a model portfolio despite its underwhelming returns. The author explains that the stock's dividend growth and relatively small position size contributed to their decision to hold on. Although the share price has gone sideways, the company has consistently raised its dividend annually. The stock has recently rebounded, posting an annualized total return of 23.8% since October 2023.

Canadian Utilities (CU.TO) has been a subject of debate among investors, given its underwhelming returns over the past few years. Despite this, the stock continues to hold a place in the model portfolio. The decision to maintain Canadian Utilities in the portfolio is based on two key factors: its dividend growth and the relatively small position size.

Dividend Growth

One of the primary reasons for keeping Canadian Utilities in the portfolio is its consistent dividend growth. The company has a history of raising its dividend annually, which provides a steady income stream for investors. This dividend growth is a crucial factor, especially for investors seeking a stable income source in their portfolios [1].

Position Size

Another reason for maintaining the position in Canadian Utilities is the relatively small size of the allocation in the portfolio. By keeping the position size small, the impact of any underperformance is minimized. This strategy allows the portfolio to benefit from the company's dividend growth without exposing the entire portfolio to significant risk [1].

Recent Performance

While the share price of Canadian Utilities has been relatively stagnant, the company has recently rebounded, posting an annualized total return of 23.8% since October 2023. This rebound suggests that the stock has the potential for further appreciation, supporting the decision to hold onto the position [3].

Conclusion

In conclusion, the decision to include Canadian Utilities in the model portfolio is driven by its dividend growth and the relatively small position size. While the stock has faced challenges in terms of share price performance, its consistent dividend increases and recent rebound make it a viable holding in the portfolio. As always, investors should remain vigilant and monitor the company's performance closely.

References

[1] https://www.fool.ca/2025/07/14/buy-the-dip-3-canadian-stocks-to-buy-now-even-if-the-markets-drop/
[2] https://www.gurufocus.com/news/2977820/dexcom-inc-dxcm-unveils-new-insights-on-type-2-diabetes-management-dxcm-stock-news
[3] https://360miq.com/stockinfo?code=CU.TO