Due to some stability in this uncertain world of financial markets, investors can consider buying some Fortis (TSX: FTS)(NYSE: FTS) Today’s inventory. Defense dividend stocks have basically been flat for over a year. It is currently trading with an attractive dividend yield of close to 4%.
Specifically, since August 2019, it has been trading between $ 50 and $ 54 per share. Therefore, near the bottom of the channel, with a fluctuation of about $ 51 per share, it is a good place to consider acquiring some shares.
Fortis shares dividends, upsides, returns
Analysts are also bullish on utility stocks. Fourteen analysts have an average 12-month price target of $ 59.50 per share, suggesting a possible short-term rise of 16%. With a dividend of about 4%, next year’s total return could be about 20%.
In the long run, utilities are growing about 5-6% annually. Therefore, from this growth and its dividends, we can expect to earn about 9-10% in the long run.
Why Fortis is a defensive stock
Fortis is a regulated utility that produces very stable revenues with stable growth. Its diverse electricity and gas portfolio consists of 10 regulated utilities that account for 93% of transmission and distribution assets.
Proof of high-quality profits is the 47th consecutive year of dividend increases. Solid equities also have below average volatility. The recent beta value is very low at 0.05. In other words, in theory, when a market goes up or down by 1%, it should go up or down by 0.05%.
Not surprisingly, Fortis is one of the top TSX Dividend stock that is trusted by retirees and income investors for its safe dividends and defense.
Dividend stock growth outlook
Barry Perry, former CEO of Fortis, retired in the New Year, but there is no big difference in utility growth prospects. It will be the same for the next 5 years and the last 5 years.
Specifically, it will show a rate-based growth rate of about 6% and increase the annual dividend by about 6%. This growth will be supported by a $ 19.6 billion capital plan from 2021 to 2025 and organic growth.
for that reason Stability and solid dividends, Fortis shares tend to be traded in premium valuations. In the last 15 years or so, the normal valuation was about 19.6.
Its earnings were stable last year during the pandemic. Growth is expected to resume this year as well. As a result, today’s stock prices are attractive. Relatively cheap valuations could lead to above average returns of around 20% next year.
Assuming a 15% return next year and a 9% return over the next four years from current levels, to say the least, the $ 10,000 investment in Fortis will change from just over 10% to $ 16,233 over five years. I will. This is not bad for defensive dividend stocks with low volatility.
Fortis’ future ex-dividend date is expected to be around mid-February. Make sure you own the shares before you can receive the next quarterly dividend.
The utility I like in the long run Brookfield Infrastructure.. Dividend stocks are well valued today and offer yields close to 4%. Interested investors can consider biting some stocks today and buy more opportunistically over time.
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Stupid contributor Cain I own a stake in Brookfield Infrastructure Partners. Motley Fool recommends BROOKFIELD INFRA PARTNERS LP UNITS, Brookfield Infrastructure Partners, and FORTIS INC.
Fortis (TSX: FTS) shares: Acquired a dividend yield of 4%
https://www.fool.ca/2021/01/05/fortis-tsxfts-stock-get-a-4-dividend-yield/ Fortis (TSX: FTS) shares: Acquired a dividend yield of 4%