Stock market conditions have continued to be positive into 2026. This has created significant wealth amongst investors as they continue to ride their stocks higher. But there are those who believe that a correction is due, as geopolitical and economic risks continue to mount. It’s true that the timing of any possible stock market weakness is difficult to forecast. But it’s not difficult to recognize that tariffs, wars, and rising energy and food prices (inflation) are not good for the economy and stock market conditions.
In this article, I’ll take a look at one Canadian dividend stock that’s an ideal holding regardless of the condition of the economy and the markets. It’s a utility stock that’s essential, defensive, predictable, and safe. And it belongs in every investor’s portfolio.
Utility stocks
Consumer demand for electricity and power remains the same regardless of economic conditions. It is an essential need that’s one of the last expenses to be cut in hard times. This is what makes utility stocks so safe and predictable. Beyond this, utility stocks benefit from regulation. Governments regulate their rate of return, ensuring consistent and dependable cash flows and, therefore, dividend payments for shareholders.
Finally, over and above these defensive characteristics, utility stocks today have an added benefit. The need for power has been increasing in recent times. The electrification of energy grids, artificial intelligence data centres, and electric vehicles are driving this. This increasing demand profile has given utility stocks another boost.
Fortis
Fortis Inc. (TSX:FTS) is a North American leader in energy delivery, with nine regulated electric and gas utilities in Canada, the U.S., and the Caribbean. In any market condition, Fortis’ services are required. This is what has enabled this utility stock to generate impressive consistency and reliability over the last many decades.
As an example of this, we need to look no further than this Canadian dividend stock’s track record. The company’s annual dividend has increased each year for the last 52 years. In the last three years, Fortis’ annual dividend per share increased at a compound annual growth rate (CAGR) of 6.5% to $3.53. Looking ahead, the company is forecasting a 4% to 6% annual dividend growth rate until the year 2030.
In Fortis’ latest results, the company reminded me once again why it’s the best Canadian dividend stock to own in uncertain and volatile times. Adjusted earnings per share (EPS) came in at $0.99, which was consistent with the prior year’s result and in line with expectations. Fortis’ strong results continue to be driven by strong rate base increases and strong cost discipline.
The bottom line
The benefit of defensive Canadian dividend stocks like Fortis cannot be understated. The consistency of returns and dependability of dividend payments are invaluable.
The market can be volatile. Fortis’ dependable and predictable business can act as a shield against this volatility, one that ensures regular and growing dividend income in all market conditions. Fortis stock currently trades at 22 times this year’s estimated earnings and 21 times next year’s estimated earnings. It’s supported by growth in demand and the expected strong rate base growth of 7% from now to 2030. This is something worth paying a premium for.
