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Fortis Is an Excellent Stock for TFSA Investors to Buy and Hold Forever

Fortis Inc (TSX:FTS)(NYSE:FTS) is a top-yielding dividend stock that can be an attractive option for investors who hold money in a tax-free savings account (TFSA). As a leading utility company in North America, Fortis makes for a fairly stable long-term investment.

A big reason for investing in the stock is undoubtedly the dividend. At 4.2%, investors are getting a fairly high yield from Fortis. It would require an investment of approximately $23,800 for that high of a yield to generate $1,000 in annual dividend income for your portfolio. And the more you can invest, the more dividend income you’ll collect.

Plus, that dividend income is likely to rise over the years as Fortis has an excellent track record for dividend growth. The company has been increasing its dividend for 50 consecutive years, and it still projects more growth to come. When announcing its five-year capital outlook in September, the company forecasted an annual dividend growth rate between 4% and 6% through to 2028.

For investors who want a high, growing dividend, Fortis can make for an excellent investment option. The company’s payout ratio remains modest at 73% of earnings. With a strong customer base and plenty of recurring revenue every quarter to rely on, this is a stock which can be suitable for a wide range of portfolios given its low risk and high yield.

Over the past 10 years, Fortis stock has achieved total returns (which include dividends) of 110%. It’s currently trading at 17 times earnings and provides investors with some great value today.