Fortis Inc.

The business

Fortis owns a portfolio of regulated transmission and distribution utilities — including ITC (U.S. electric transmission), UNS Energy, FortisBC and FortisAlberta — with ~99% of assets regulated.

Earnings and cash flow come almost entirely from allowed regulatory returns on a growing rate base, making Fortis a low-volatility, rate-base-compounder.

The moat

Regulated monopoly franchises across multiple jurisdictions provide predictable, government-sanctioned returns and formidable barriers to entry.

Geographic and regulatory diversification smooths risk, and ITC's transmission footprint is a scarce, long-duration asset benefiting from grid-investment tailwinds.

Financial snapshot

Most recent reported period : Q1 2026 (ended Mar 31, 2026). Figures reflect the review date — confirm current numbers before acting.

Free cash flow yield & sustainable growth

Earnings yield : ≈4.3%Trailing P/E of ~23.5x at C$79.61 implies a ~4.3% earnings yield (1 ÷ 23.5). Fortis is a regulated utility in a heavy capital-investment phase, so reported free cash flow is negative and an earnings yield is the appropriate lens.

Fortis targets multi-year rate-base growth funding mid-single-digit EPS and dividend growth; because it is in a large capital-investment program, reported free cash flow is negative, so FCF yield is not a meaningful lens for a regulated utility.

EPS of C$0.99 in Q1 2026 reflects steady, regulation-driven earnings growth rather than cyclical swings.

See the full earnings-yield ranking →

Valuation & what to watch

At ~C$79.61 and ~23.5x earnings, Fortis trades at a premium utility multiple that reflects its safety and dividend-growth pedigree; the earnings yield is ~4.3% versus a 3.2% dividend yield.

This is a 'sleep-well' compounder priced accordingly — the appeal is durable ~4-6% annual dividend growth and rate-base expansion, not a bargain multiple.

Dividend

C$2.56 per share annually (~3.2% yield), backed by a 50+ year consecutive dividend-increase record and guidance for continued mid-single-digit annual growth.

Risks & the bear case

• Interest-rate sensitivity: as a bond-proxy, high-capex utility, rising rates pressure both financing costs and valuation.
• Regulatory risk across jurisdictions — adverse rate decisions or allowed-ROE cuts would dent growth.
• Large ongoing capital program requires continual debt and occasional equity funding, and a premium multiple caps upside.

Recent developments

Reported Q1 2026 with C$3.40B revenue, C$501M net income and C$0.99 EPS, extending its steady rate-base-driven earnings trajectory and its long-running dividend-growth streak.

Verdict

Fortis is a textbook defensive utility: near-fully regulated, geographically diversified, with one of the most reliable dividend-growth records in Canada — the trade-off is a premium valuation and classic rate-sensitivity. It fits income and capital-preservation-focused investors who value predictability over upside, and should be judged on rate-base and EPS growth rather than FCF. Informational only; CoinCompass is a publisher, not an adviser.