Among the list of great all-time Canadian dividend picks, Fortis Inc. (TSX:FTS)(NYSE:FTS) remains a top pick of mine for many reasons. In this article, I’m going to give readers a view of the key drivers behind why Fortis should be a core holding in every long-term income portfolio.
This is particularly important in an environment of economic volatility and uncertainty which we are experiencing today.
Fortis’ dividend yield, though robust, is not the key reason I’ve recommended this stock in the past. Rather, the company’s impressive long term track record of dividend increases spanning nearly five decades is what has kept my focus on this stock.
Dividend growth is much more important to me than a given company’s current dividend yield over the long term. This is due mainly to the power of compounding.
Owning a company’s stock that continually increases its dividend over time is like owning a bond paying out increasing coupons over time.
This inflation protection on the income one earns from an investment in Fortis allows investors to earn growing income over time, making Fortis’ stock a great buy and hold investment for a retirement portfolio today.
I expect we will see more turmoil on the horizon so picking up more shares of slow and steady dividend growers like Fortis can prove to be a great investment strategy a decade or two from now.
Invest wisely, my friends.
