Top Canadian Utility Stocks of 2025

Known for their defensive characteristics and high dividend yields, Canadian utility stocks are great picks for bear markets. These large-cap stocks tend to possess lower volatility due to their highly regulated nature and evergreen demand.

Interested in finding the best Canadian utility stocks to add to your investment portfolio? Keep reading to find out!

Related: List of stocks in the TSX utility sector

What are utility stocks?

Utility stocks are the publicly traded shares of companies involved in the production and distribution of essential infrastructure services to the public.

They include, but are not limited to, water, natural gas, and electricity companies. These companies keep the taps in your house running, your lights on, your stove working, and provide heating in the winter.

Compared with the other 11 major stock market sectors, utility stocks have a few traits that make them traditionally defensive investments. These include:

• Lower-than-average volatility compared with other sectors, and a lower-than-average sensitivity to the overall market’s movement.
• Evergreen demand due to the essential nature of their services even during a recession, compared with more cyclical sectors like consumer discretionary or information technology.
• Consistent and more predictable earnings and dividend yields because the rates they charge can be regulated by the government or contractually guaranteed.

One weakness of utility stocks is their sensitivity to changes in interest rates. Many utility companies carry high debt loads due to their need to constantly maintain and upgrade infrastructure. This leads to a higher-than-average degree of capital expenditures. Rising interest rates make it harder for utility companies to access debt financing, which can hurt their margins and earnings.

Top Canadian utility stocks

Utility stocks in Canada can represent all market capitalizations, whether small-, mid-, or large-cap. The most popular Canadian utility stocks tend to be blue-chip ones with larger market capitalizations. These companies usually have an established track record of profitable operations and many years of consecutive dividend increases.

Fortis Inc.

Fortis is one of Canada’s largest utility holding companies and a stalwart in the realm of Canadian dividend knights, having increased its dividend for 51 consecutive years. With a current dividend yield of approximately 4.06%, Fortis stands alongside Canadian Utilities as a dividend king.

Recently, Fortis has doubled down on its promise to transition towards renewable energy. The company is spearheading several projects across North America to modernize its infrastructure and reduce carbon emissions. In 2024, Fortis made significant investments in wind and solar energy, including a major solar farm project in Arizona and a wind energy partnership in Canada. These efforts align with Fortis’ goal of focusing 99% of their assets on energy delivery and renewable generation by 2035, positioning the company as a leader in the clean energy transition.

Additionally, Fortis has expanded its customer base, now serving over 3.7 million clients, thanks to strategic acquisitions in the Caribbean and North America. The company’s financial performance remains strong, driven by its stable recurring revenues from its core utility operations, which continue to span across Canada and into the Caribbean.

Emera Inc.

Emera operates through multiple different subsidiaries to generate, transmit, and distribute electricity for clients across Canada, the U.S., and the Caribbean. It operates through segments dedicated to Canadian electric utilities, non-Canadian electric utilities, and gas utilities and infrastructure.

Emera Inc., a key player in the Canadian energy sector, is recognized for its consistent dividend performance and strong dividend growth, making it a favorite among income-focused investors. The company’s power generation sources include coal-fired, natural gas and oil, hydroelectric, wind, solar, and biomass power plants. Additionally, Emera is involved in the purchase, distribution, and sale of natural gas and liquefied natural gas (LNG).

As of 2025, Emera has been actively expanding into renewable energy, with significant investments in wind and solar projects, reinforcing its commitment to sustainability and its plan to transition the majority of its operational capacity to renewable sources by 2035.

Emera’s strategic initiatives have led to considerable growth in its customer base across North America, bolstered by acquisitions and organic expansion. The company’s financial performance remains robust, driven by recurring revenues from its utility operations. Analysts look favorably on Emera’s future, noting its strategic investments to enhance energy delivery and infrastructure resilience.

Canadian Utilities Ltd.

Canadian Utilities operates through three segments to deliver electricity, natural gas, and retail energy services to a worldwide base of clients. This includes the provision of electricity, natural gas, infrastructure such as pipelines, compressor sites, storage facilities, delivery points, and industrial water solutions.

In the third quarter of 2024, the company reported adjusted earnings of $102 million, an increase from $87 million in the same period of 2023. Like Fortis, Canadian Utilities is also a dividend knight, having paid out and increased dividends consecutively for 52 years.

As of January 22, 2025, Canadian Utilities’ Class A shares (ticker: CU.TO) are trading at approximately CAD 33.90. The company has a strong history of dividend payments, with a quarterly dividend yield of 5.4%.

Investing in international utility stocks

Utility stocks aren’t just found in the Canadian market. Investors seeking to diversify further can also look for utility stocks in the following geographies:

• The U.S. stock market, which includes companies listed on the New York Stock Exchange and NASDAQ.
• International developed markets, which includes Europe, the U.K., Australia, and Japan.
• International emerging markets, which includes Asia, Russia, Africa, South America, and the Middle East.

Keep in mind that purchasing international utility stocks might require you to convert currency. Investors can avoid this using Canadian Depository Receipts (CDRs) or by buying an exchange-traded fund (ETF) that holds international utility stocks.

Are utility stocks a good investment?

The answer to this question depends on your investment objectives, risk tolerance, and time horizon. In general, utility stocks are good investments for investors seeking lower volatility and higher than average dividend payments. This often includes investors who are on the verge of retiring or already retired. For these investors, ensuring safety of principle and a steady stream of consistent income is more important than ensuring absolute growth at all costs.

However, younger investors who are willing to tolerate more risk in exchange for higher possible returns may find utility stocks to be a bit boring during bull markets. In these scenarios, they might underperform higher-growth sectors such as consumer cyclicals or information technology. Despite their high dividend yields, investors should be careful to not use utility stocks as a replacement for low risk bonds as they still have market risk and can fall during a crash.

Regardless, utility stocks are an easy way for investors to start investing in the Canadian stock market. Because they are mostly large-cap blue chip stocks, they can be a useful way for investors to learn the ins and outs of how to hold a stock. A good way to use utility stocks is as the core of a defensive low volatility portfolio. With utility stocks, reinvesting their periodic dividend payments is key, as the compounded returns will greatly enhance long-term total returns.