If You’d Invested $2,500 in Fortis Stock in 2006, Here’s How Much You’d Have Today

Despite being a low-risk stock that investors typically buy for defence, Fortis has significantly outperformed the TSX since 2006.

| More on:
The sun sets behind a power source

Source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Although there are hundreds of Canadian stocks to choose from, one of the best and most popular stocks that Canadians invest in is Fortis (TSX:FTS), the large-cap utility stock with a market cap of more than $27 billion.

Created with Highcharts 11.4.3Fortis PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Utility stocks are always popular investments, given their role as safe and defensive core portfolio stocks. Therefore, especially in uncertain economic environments and volatile market conditions, as we’ve seen lately, utility stocks can play an important role in our portfolios.

Furthermore, because they are so safe and, more importantly, reliable, utility stocks can be excellent long-term investments, helping to compound your money. In this way, investors can consistently increase their passive income.

For example, Fortis has the second-longest dividend growth streak in Canada, increasing its dividend for 49 consecutive years.

Furthermore, since the start of 2006, Fortis is up by 339% – a compounded annual growth rate (CAGR) of 8.9%. That’s better than both the TSX and S&P 500 over that stretch, which have earned investors CAGRs of 3.3% and 7.4%, respectively.

In other words, if you had invested $2,500 in Fortis stock back at the start of 2006, your investment would be worth $10,983.75 today, compared to $4,376 if you had invested in the TSX or $8,720.50 investing in the S&P 500.

So let’s look at why Fortis is such a high-quality stock that you can buy now and hold with confidence for decades to come.

Why is Fortis stock such a stellar investment for Canadians?

Plenty of utilities make excellent long-term core portfolio stocks. Fortis is one of the best due to its consistent growth and long-term track record of increasing the passive income it provides to investors.

Utilities are already low-risk businesses due to the fact that the services they provide are essential and the industry is highly regulated by governments. Fortis takes it a step further by owning multiple utility companies, which diversifies its operations and helps lower the risk even more.

In total, Fortis stock owns 10 different utility operations spread across Canada, the United States and the Caribbean, serving 3.4 million customers.

Furthermore, because its business is regulated and it’s such a defensive company, Fortis’ future revenue and profitability growth are often highly predictable, another reason why it’s a low-volatility stock.

For example, right now, Fortis is in the midst of a five-year capital plan whereby it expects its rate base will grow at a CAGR of 6% through 2027. In addition, it also expects that its dividend, which currently offers investors a yield of approximately 4%, will grow at a CAGR of roughly 5% through that stretch.

Therefore, while it doesn’t offer the same type of explosive growth potential that other stocks may offer, Fortis is appealing because its defensive and is known for growing at a slow but steady pace.

In just the last five years, for example, its revenue has increased by 33%, net income by 35%, and dividend by 33%.

And going forward, as the world continues to transition to cleaner energy sources and the need for new electric transmission projects continues to grow, Fortis has a ton of investment opportunities to continue expanding its operations.

Therefore, while the market and economic environments are so uncertain and Fortis trades off its highs, not only is it an excellent stock to buy now, but it’s one of the best investments that you can hold for years to come.

Should you invest $1,000 in Ishares S&p/tsx Capped Energy Index Etf right now?

Before you buy stock in Ishares S&p/tsx Capped Energy Index Etf, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Ishares S&p/tsx Capped Energy Index Etf wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $21,345.77!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 24 percentage points since 2013*.

See the Top Stocks * Returns as of 4/21/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Daniel Da Costa has no position in any of the stocks mentioned. The Motley Fool recommends Fortis. The Motley Fool has a disclosure policy.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Dividend Stocks

ways to boost income
Dividend Stocks

How I’d Invest $5,000 in Canadian Energy Stocks to Reach Toward Millionaire Status

These energy stocks can provide investors in Canada with some of the top growth opportunities and dividends to boot!

Read more »

senior relaxes in hammock with e-book
Dividend Stocks

How I’d Invest $8,200 in Canadian Monthly Dividend Stocks to Pay for My Retirement Lifestyle

If you have some cash on hand, then these monthly dividend stocks can provide you with cash for life.

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

Here’s Exactly How $20,000 in a TFSA Could Grow to $300,000

Can you grow $20,000 into $300,000 by holding the iShares S&P/TSX Index Fund (TSX:XIC) in a TFSA?

Read more »

ETF stands for Exchange Traded Fund
Dividend Stocks

How to Use $15,000 in a High-Yield Dividend ETF for Steady Passive Income

This ETF has it all, a strong portfolio of dividend payers, along with a high yield for investors.

Read more »

Person holds banknotes of Canadian dollars
Dividend Stocks

A 9.9 Percent Dividend Stock Paying Cash Every Month

If you are looking to park your money for the short term and earn from it, this 9.9% dividend stock…

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

Have Room in Your TFSA? 1 Canadian Dividend Champion for April Investors

If you've got extra cash in your TFSA, the latest dip in markets may provide you with a golden opportunity…

Read more »

engineer at wind farm
Dividend Stocks

Beginner Investors: How I’d Allocate $5,000 in 2 Safe Dividend Stocks

There are plenty of great dividend stocks on the market, but these two are buy-and-forget candidates that will boost your…

Read more »

grow money, wealth build
Dividend Stocks

Invest $25,000 in These 3 Dividend Stocks for $1,600 in Annual Income

These three Canadian dividend stocks could deliver a reliable passive income of over $1,600 annually.

Read more »