One of my top dividend picks for those seeking reliable and growing income over the long-term continues to be Canadian utility company Fortis Inc. (TSX:FTS)(NYSE:FTS). There are a number of key factors I think every income-oriented investor ought to consider, and in that context, I think Fortis checks off all the boxes for those with a long-term investing time horizon.
Perhaps the most important aspect any investor seeking long-term income growth ought to consider is not the given dividend yield of a company on a particular day, but rather the rate at which a company grows its dividend over time. Fortis has historically been one of the best stocks on the TSX in this regard. The company has grown its dividend each and every year for nearly five decades now. This is a streak the company will not want to end in any circumstances, and I think this makes this dividend one of the safest as well, for this reason.
Adding to the dividend safety argument is the regulated nature of the majority of the company’s revenues. Accordingly, the cash flow growth we’ve seen with Fortis in the past is essentially locked-in by these iron clad contracts. I think the growth potential Fortis provides isn’t earth shattering, but is of the mid- to high-single digit nature, enough to support its growing dividend over time and add to the value argument for owning this stock.
Currently, shares of Fortis yield around 3.9%, a testament to the safety of this dividend and where investors expect the dividend growth to take this yield over time. I’d highly recommend this stock as a core position in anyone’s income-seeking portfolio.
Invest wisely, my friends.
