Fortis (TSX:FTS) is an international gas and power utilities provider. It has 10 utility operations in Canada, the U.S., and Caribbean nations, with more than 3.4 million customers worldwide.
Given the current global energy crisis, prices of utility stocks are facing high volatility. However, investors can take advantage of this uncertainty and invest in such utility stocks to reap benefits in the future.
So, is Fortis stock worth buying in March 2023? Here are some key things to think about.
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Fortis boasts of strong quarterly and annual earnings
Fortis’s recent earnings report highlights one of the key strengths of this stock — its fundamentals.
Fortis reported net income of US$370 million in the fourth quarter (Q4) of 2022. On a diluted per-share basis, this amounted to US$0.77 attributable to shareholders. Compared to the same quarter last year, Fortis has shown some solid bottom-line growth, considering Q4 2021 saw only US$0.63 in earnings per share materialize.
On the top line, it was much of the same story. Fortis’s overall revenue increased to US$3.17 billion from Q4 2021’s US$2.58 billion.
Fortis’s full-year picture was just as rosy, with 7% net earnings growth seen on a year-over-year basis. The company brought in US$2.78 per share in earnings last year, relative to US$2.59 the year prior.
Gas and utility provider declares Q2 2023 dividends
For the quarter ending December 2022, Fortis has declared a dividend of $0.56 per common share. The payments will be disbursed from the company’s end on June 01, 2023. They will be applicable to shareholders of record on May 17, 2023.
Fortis’s dividend distributions are the key reason many investors own this stock. While FTS stock yields 3.9% at the time of writing, it’s the company’s earnings growth over time that has investors excited. This next dividend increase will mark the 50th consecutive such increase. Thus, as far as Canadian dividend stocks are concerned, Fortis’s growth profile is among the best by a long shot.
Bottom line
Keeping in mind the current state of the energy market and the strong financial standpoint of the company, Fortis is a must-buy stock in March 2023. I think this is a stock which is solid fundamentally and remains a core holding of many passive-income investor portfolios for good reason.
The defensive nature of Fortis’s business model should also not be overlooked. Unless its customers turn off their power and lights, Fortis will continue to earn steady cash flow over time. Thus, this is among the long-term picks on the TSX that I think is worth buying right now.
