The great advantage utilities companies provide investors with is an incredible long term level of stability, with respect to revenue and earnings growth. Having a high level of certainty in regards to the amount of money one expects to earn five, 10 or 50 years from now allows for continued dividend increases over time.
Also, this allows for long term investments in projects that will continue to generate long term earnings growth over decades. This furthers the compounding effects of owning such companies.
Fortis Inc. (TSX:FTS)(NYSE:FTS) is my top pick in the utilities space, mainly due to the ability of this company to continuously raise its dividend, each and every year for nearly five decades.
This ability has been driven by incredible value creation over time, due to an impressive asset base, which continues to provide investors with excellent operating fundamentals relative to its peers. From a dividend and value perspective, Fortis checks all the boxes for those with income needs or capital appreciation expectations over long-term investment time horizons.
Therefore, Fortis is a great choice for investors considering a retirement investment or an investment for their kid’s registered education savings plan (RESP) today. As far as steadiness of earnings go, few companies beat Fortis.
The market may not fully appreciate the value of this earnings stability right now. However, over the long term, going with slow and steady equities could turn out to be a smart move, should we see another leg down as this recession develops.
Invest wisely, my friends.
