In current market conditions where the TSX is near all-time highs, it makes sense for investors to consider solid companies with wide moats.
Fortis
Fortis (TSX:FTS) owns approximately $75 billion in utilities in Canada, the United States and the Caribbean. Its operations include rate-regulated power generation facilities, electricity transmission networks and natural gas distribution companies.
These companies’ revenues are generally predictable and reliable, as households and businesses need electricity and natural gas under all economic conditions.
The demand for electricity and natural gas is expected to increase in the coming years. Gas-fired power generation facilities are being built to power AI data centers. This contributes to the expected increase in electricity consumption as more people switch to electric vehicles.
Fortis is working on a $28.8 billion capital program that will increase its interest base at a compound annual rate of approximately 7% over five years. This should lead to rising earnings and higher cash flow to support steady dividend increases. Fortis has increased its dividend every year for the past 52 years and plans to increase the payout by 4% to 6% annually until at least 2030.
Enbridge
Enbridge (TSX:ENB) is a giant in the North American energy infrastructure and utilities sector with a current market capitalization of nearly $145 billion.
The company is best known for its extensive oil and natural gas transmission pipeline networks that transport approximately 30% of the oil produced in Canada and the United States and 20% of the natural gas used by American homes and businesses. These assets are strategically important to the smooth functioning of the Canadian and US economies.
In recent years, Enbridge has expanded its asset portfolio to diversify its revenue stream. Enbridge acquired an oil export terminal in Texas and bought a stake in the Woodfibre liquefied natural gas (LNG) export facility being built in British Columbia. In 2024, Enbridge spent $14 billion to buy three natural gas companies in the United States. The deals made Enbridge the largest natural gas utility operator in North America. The combination of these assets with the natural gas transmission network places Enbridge well-positioned to benefit from expected growth in natural gas demand.
Finally, Enbridge strengthened its renewable energy group when it bought the third-largest U.S. solar and wind developer. The transition to renewable energy remains important and demand is high from technology companies wanting to use solar and wind energy to power their facilities.
Enbridge’s current $35 billion capital program is expected to boost distributable cash flow by approximately 5% per year beginning in 2027. This should support continued dividend growth. Enbridge has increased its dividend in each of the past 31 years. Investors who buy ENB stock at the time of writing can get a dividend yield of 5.8%.
Bank of Nova Scotia
Bank of Nova Scotia (TSX:BNS) is up 33% over the past six months. Despite the big rally, the stock still offers a solid dividend yield of 4.3% and more upside potential could be on the way.
Bank of Nova Scotia is making good progress with its turnaround plan to improve profitability and shift capital investments away from Latin America and focus more on the US and Canada. The company reduced its workforce and streamlined operations to reduce costs while making the company more efficient. Bank of Nova Scotia has also started selling some of its operations in Latin America and has acquired a 14.9% stake in KeyCorp, a US regional bank.
Adjusted earnings and return on equity (ROE) improved in fiscal 2025. Additional ROE increases should contribute to a higher price-to-earnings ratio for the stock.
The bottom line
Fortis, Enbridge and Bank of Nova Scotia pay attractive dividends that are expected to continue growing. If you’ve got some money to put to work, these stocks deserve to be on your radar.
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