Canadian utility stocks usually get filed under a single heading, boring dividend investments, and that heading hides more than it reveals. Owning Hydro One means owning an Ontario transmission and distribution monopoly with no power plants and one regulator. Owning Fortis means owning a collection of regulated utilities spread across Canada and the United States, with most of the assets south of the border. Owning Capital Power or TransAlta means accepting real exposure to the price of electricity. Brookfield Renewable is a global renewable investment platform that happens to pay a distribution. AltaGas is partly a regulated gas utility and partly a midstream and propane export business. Enbridge, which most Canadians would include on any list of dependable dividend payers, is not really a utility at all.

Yet investors comparing these companies are usually after the same thing: dependable cash flow and a dividend that keeps arriving. This article tries to sort out which of the ten companies actually deliver it, which are cheap or merely look cheap, and which one I would hold if I could only own a single name for the next decade or longer. The framework running underneath all of it is simple and often ignored. Asset growth is not shareholder growth. A utility announcing a CAD 20 billion capital plan has told you how much it intends to spend, not how much more each existing share will earn when the spending is finished. The difference is dilution, financing costs and regulatory lag, and it explains most of the gap between utilities that look similar on a slide and behave very differently in a portfolio.

Prices, yields and multiples below are approximate and reflect markets in early October 2026. They will have moved by the time you read this, so treat them as a way of comparing the companies rather than as a quote sheet. This is my analysis, not personal investment advice.

Why the list of Canadian utility stocks keeps shrinking

If your mental list of Canadian utility and power stocks dates from a few years ago, several names are missing. Innergex Renewable Energy was taken private by La Caisse de depot et placement du Quebec in July 2025 at CAD 13.75 per share. Boralex was acquired by Brookfield and La Caisse, with the deal completed on August 14, 2026. And on October 6, 2026, Emera announced a deal to acquire both Canadian Utilities and its parent ATCO, which is why Canadian Utilities does not get its own profile here. It is now a fixed-ratio Emera merger security, and I discuss it inside the Emera section. What is left for a Canadian investor is a smaller, more concentrated group, and the differences between the survivors matter more as a result.

What makes a utility a utility

A regulated utility is a business where a regulator, not the market, decides how much it can charge. The regulator lets the company recover its legitimate operating costs and earn an approved return, called the allowed return on equity, on the capital invested in its network. That invested capital is the rate base. When a utility builds a new transmission line or replaces old gas pipe and the regulator approves it, the rate base grows, and so do the earnings that the allowed return is applied to. This is why utility growth is usually described in terms of rate-base growth, and why the allowed return and the share of the rate base funded by equity (the deemed equity) matter more than any single year of weather or demand. Hydro One, Fortis and most of Emera work this way. The risks are regulatory rather than commercial: a regulator can set the allowed return lower than the company asked for, and there is usually a lag between spending money and earning a return on it.

Independent power producers are a different animal. Capital Power and TransAlta own power plants and sell the electricity under long-term contracts (power purchase agreements, or PPAs), through hedges, or into the open market at whatever the price happens to be, which is called merchant exposure. Nobody sets their return. A contract gives revenue certainty for the life of the contract, but the contract expires, the plant ages, and the part of the output sold at market prices can swing earnings sharply in either direction. Contracted renewable developers such as Northland Power and Brookfield Renewable sit between the two. Their long-term contracts produce utility-like cash flow once projects are running, but construction, financing and wind-resource risks are real and not regulated away. Finally there are hybrids, AltaGas and Enbridge, which pair some regulated utility earnings with pipelines, storage and export infrastructure whose results depend on volumes and commodity spreads.

One practical consequence is that these stocks should not trade at the same multiple or pay the same yield, and the measures used to value them differ. Regulated utilities are reasonably valued on price to earnings. Independent power producers are better valued on AFFO, adjusted funds from operations, a cash-flow measure that adds back non-cash charges and subtracts sustaining capital. Brookfield Renewable uses FFO, funds from operations, which is a looser cousin. Enbridge uses distributable cash flow per share, or DCF, because its depreciation and non-cash items distort earnings. Where I quote P/E for these businesses it is for reference only.

Why utilities can be defensive and risky at the same time

People buy utilities because electricity and gas demand barely notice recessions. That is real. But the business is also capital intensive, carries a lot of debt, depends on regulators, and has to keep raising money to build more. The valuation of a stock that pays most of its return as a steady dividend is sensitive to what you could earn on a government bond instead. A 3% utility yield looks very different when ten-year government bonds yield 2% than when they yield about 4%, as they do now: the Government of Canada ten-year yield was about 3.9% on October 8, 2026, against a Bank of Canada policy rate of 2.25% that was held on September 2. The next announcement is October 28, and I am not going to guess what it will say. What matters for the comparison is that utilities with thin yields, long-duration growth and heavy financing needs are the most exposed to a world where bond yields stay near 4%, while those with higher yields and stronger balance sheets have more of a cushion.

Fortis: the diversified regulated benchmark

Fortis is the most diversified conventional regulated utility in the group. It owns nine regulated electric and gas utilitiesserving about 3.5 million customers, roughly 65% of its assets are in the United States, and about 95% of the assets are transmission and distribution wires and pipes rather than generation. The largest pieces are ITC, the independent transmission operator across the U.S. Midwest, the Arizona utilities (Tucson Electric Power and UNS), FortisBC in British Columbia and FortisAlberta. The practical result is that no single regulator controls the company. ITC’s base allowed return is 9.98%, FortisAlberta’s is 8.97%, FortisBC earns 9.65% on thinner equity, and the Arizona rate case now before the Commission has regulatory staff recommending about 9.75% while the state attorney general argues for far less. That spread is the point: a bad decision in one jurisdiction hurts, but it does not define the company.

Growth is funded and reasonably visible. Fortis’s second-quarter report describes a CAD 28.8 billion five-year capital plan lifting rate base from about CAD 42.4 billion to CAD 57.9 billion, roughly 7% a year, with no new equity beyond the dividend reinvestment plan. That last detail matters for the central theme. Because Fortis is not issuing meaningful new shares, rate-base growth should convert into earnings growth more cleanly than at utilities that fund their plans with equity, although it does not convert one for one. Asset sales are diluting 2026 earnings by roughly CAD 0.05 a share, and the dividend reinvestment plan adds shares quietly each year. The company has raised its dividend for 52 consecutive years, currently pays about 3.4%, and distributes about 70% of adjusted earnings. Management guides to dividend growth of 4 to 6% a year through 2030. The credit profile is strong: S&P rates the company A- at the issuer level (BBB+ on its unsecured debt) with a stable outlook, DBRS A(low) and Fitch BBB+. Moody’s withdrew its Fortis ratings in January 2026 at the company’s request, a detail worth knowing but not one I read as a warning.

The tension is price. At roughly CAD 76, Fortis trades at about 21 times trailing adjusted earnings of CAD 3.53, somewhat above where it has typically traded in recent years, and its yield is toward the low end of its recent range. You are paying a full price for a very good business. The company I would most like to own for a decade is not the stock I think is cheapest today, and Fortis is the clearest example of that distinction in this article.

Emera, Canadian Utilities and ATCO

Emera is headquartered in Halifax but is already largely a Florida utility. Tampa Electric and Peoples Gas, both in Florida, account for most of its earnings, and Nova Scotia Power, the business most Canadians associate with the company, is the weakest earner of the three because it is regulated at a lower allowed return (8.75 to 9.25% on up to 40% equity) and is expected to earn below that range in 2026. Florida is the opposite: Tampa Electric’s allowed return range runs from 9.5 to 11.5% on 54% equity, with a midpoint of 10.5%, generous compared with Canadian utilities, though one Tampa Electric rate case is on appeal at the Florida Supreme Court. About 95% of earnings are regulated. The stock yields roughly 4.5%, more than Fortis, with a dividend that has risen for 19 years but is guided to grow only 1 to 2% a year. The payout is high, about 84% of 2025 adjusted earnings of CAD 3.49. The balance sheet is weaker: BBB- at S&P, Baa3 at Moody’s and BBB at Fitch, with Moody’s setting a downgrade threshold at cash flow of 12% of debt that management says it is running comfortably above, targeting the “mid-12s.” Roughly 10% of the CAD 20.4 billion capital plan is funded with equity through the dividend reinvestment plan, an at-the-market program and hybrid securities. On the figures alone, Emera offers more yield, less growth and less cushion than Fortis.

Then, on October 6, 2026, Emera announced it would acquire Canadian Utilities and ATCO in an all-share deal. The companies describe it as a merger of equals, and I would not. Emera is the legal acquirer, its shareholders end up with roughly 60% of the combined company, the headquarters stays in Halifax, Emera’s Scott Balfour remains CEO and Emera nominates seven of the thirteen directors. It is better understood as an Emera-led acquisition with a generous governance accommodation for the other side. The structure is a little involved. Canadian Utilities Class A shareholders receive 0.755 Emera shares per share, and Class B holders 0.819. ATCO holders receive 0.865 Emera shares plus one share of “New ATCO,” a new Calgary-based public company that will hold ATCO’s non-utility businesses (housing, defence, ports and retail energy) under Nancy Southern as chair and CEO, with a dual-class structure that gives the voting shares to Sentgraf, the Southern family holding company. Canadian Utilities’ preferred shares stay outstanding. According to the investor presentation, roughly 60% of the enlarged Emera will belong to existing Emera holders, 20% to Canadian Utilities’ public shareholders and 20% to ATCO’s. The combined business would have an enterprise value of about CAD 72 billion, a rate base near CAD 45 billion, about six million customers and a CAD 32 billion capital plan through 2030 growing rate base 7 to 8% a year. Closing is expected in the third or fourth quarter of 2027 after shareholder votes (including a majority-of-the-minority vote of Canadian Utilities Class A holders), the Alberta Court of King’s Bench, and a long list of regulatory approvals in Canada, the United States and elsewhere.

Canadian Utilities holders gain a bigger dividend. At the exchange ratio, 0.755 Emera shares carry about CAD 2.21 of annual dividends against Canadian Utilities’ current CAD 1.85, an uplift of roughly 20%. That is why Canadian Utilities now trades within about half a percent of 0.755 times the Emera price. It is a claim on Emera, not an independent utility thesis, even though its dividend record of more than five decades is the sort of thing that would otherwise earn it a profile. Fitch has placed both Canadian Utilities and ATCO on negative watch and says it expects their ratings to converge with Emera’s, which tells you which direction the credit is expected to travel.

The shareholder issue, for Emera holders, is the arithmetic. Emera says the transaction will be accretive to adjusted earnings per share in the first full year after closing, but it has not published a pro forma earnings figure or the number of shares it will issue, and the structure makes that hard to infer from the outside. There are three sets of exchange ratios, ATCO’s ratio is adjusted for assumed liabilities and for certain Emera shares issued to New ATCO in the spinoff, and existing Emera holders go from owning all of the company to owning about 60% of a much larger one. The share count will clearly rise substantially. The final per-share result will depend on the earnings contributed by the acquired utility businesses, the financing, transaction adjustments and the synergies actually realized. So the relevant question for an Emera shareholder is not whether the combined company becomes larger or whether its rate base grows faster, because both are certain. It is whether the acquired earnings grow faster than the share count. None of this means the deal is a mistake: Alberta diversifies Emera away from Florida, and scale may help with financing and procurement. But first-year accretion is a claim to be demonstrated, not accepted, and the investment question is whether greater scale and Alberta exposure improve Emera by more than the issuance, a still-thin credit profile and the integration risk cost it.

Hydro One: the cleanest conversion of assets into per-share growth

Hydro One is the simplest company in the article. It owns Ontario’s high-voltage transmission grid and a large distribution network, it owns no generation, almost everything it earns is regulated, and it answers to one province and one regulator, the Ontario Energy Board. The allowed return is 9.36% on 40% equity through 2027. In the second quarterearnings per share were CAD 0.62 against CAD 0.54 a year earlier.

What makes it interesting is how directly the growth reaches shareholders. Rate base is expected to grow from about CAD 23.6 billion in 2022 to CAD 32.5 billion in 2027, around 6.6% a year, and management targets earnings per share growth of 6 to 8% a year from a 2022 base of CAD 1.61, a range implying CAD 2.15 to 2.37 in 2027. Because the company does not anticipate issuing equity, per-share growth is essentially the same as total earnings growth. This is what asset growth becoming shareholder growth looks like. The balance sheet is the strongest of the ten: S&P rates the parent A- and the main operating subsidiary A, Moody’s A3, DBRS A(high), and cash flow relative to net debt is about 14.4% against a downgrade level management has cited near 11%. The dividend of CAD 1.41 is about 60% of earnings, has been raised every year from 2016 to 2026 at roughly 6% a year on average, and yields only about 2.8%.

The trade-offs are visible. A low yield means the return depends on growth continuing. The stock trades around 21 to 22 times earnings, roughly in line with where it has traded in recent years on earnings, and its yield is toward the low end of its recent range. The risk is concentration: one province, one regulator and the Province of Ontario, which still owns roughly 47% of the company. It does not run the utility day to day, but it cares about electricity bills in a way a private owner would not. The guidance runs only through 2027. On October 7, 2026, Hydro One filed its 2028 to 2032 joint transmission and distribution rate application with the Board, proposing approximately CAD 37 billion of investment over the five years, subject to regulatory approval. I think the regulatory outcome is now the single most important thing to watch with this stock, and the filing illustrates the point of this article: proposed capital spending is not automatically shareholder growth. Whether Hydro One can keep turning regulated investment into earnings per share growth without issuing equity depends partly on what the Board approves. I do not say that to be gloomy. It is simply the next real test of how the regulator treats a company with a premium valuation.

Capital Power: an independent power producer, not Hydro One with a different ticker

Capital Power owns natural-gas-heavy generation plus wind and battery assets across Alberta, Ontario and the United States, where it has been expanding in the PJM market through the acquisition of the Hummel and Rolling Hills plants. Roughly 75% of its adjusted EBITDA is contracted, which sounds high, but the remaining quarter is exposed to power prices. The company sizes its upside from higher Alberta prices at CAD 10 to 20 per megawatt-hour on 466 MW of merchant capacity, which is a reminder of how much that merchant quarter can move results. It has also signed a long-term energy supply agreement, for more than ten years, to supply 250 MW to a Meta data centre in Alberta, with the load expected in the second half of 2028. That is a signed contract with a named customer, exactly the kind of evidence that I consider more useful than slide decks about data-centre demand.

The stock is the one where valuation deserves the most care. On the midpoint of 2026 guidance for AFFO of CAD 890 million to CAD 1.01 billion, the shares trade at about 10 to 11 times, which looks cheap against both the market and the utilities. But 2026 guidance is below 2025 actual AFFO of CAD 1.07 billion (CAD 7.08 a share), and the company’s second-quarter report says that AFFO of CAD 328 million, up from CAD 235 million a year earlier, was driven primarily by the recognition of clean technology investment tax credit grants on eligible Canadian renewables projects. It has not disclosed how large those grants were, and the reaffirmed full-year range does not tell me how much of that benefit it contains. So I would not treat the headline multiple as unquestionably normalized earnings power. Until the contribution from tax-credit-related items is clear, a low multiple on this measure is a reason to look closer, not a reason to conclude the shares are cheap.

The dividend yields about 4.4% and is covered roughly twice (a payout of about 47% of 2026 guided AFFO). It has risen for 13 consecutive years, but the latest increase was only 2%, down from 6% last year, and management’s new target is 2 to 4% growth through 2030. Management also targets AFFO per share growth of 8 to 10% a year from the 2026 base, which is where the investment case lives, but that growth depends on acquisitions, power prices and the company financing the work without hurting existing shareholders. Credit is BBB- at both S&P and Fitch and BBB(low) at DBRS. The question is whether a modest valuation discount is enough compensation for merchant exposure and a weaker credit than the regulated names, and I do not think the answer is obviously yes. It earns the number-two spot on value for reasons I explain below, but it is not a bargain.

TransAlta: a different animal again

TransAlta is Alberta hydro, wind, solar and gas generation, with U.S. assets and a growing list of acquisitions. Most of its earnings come from selling electricity either under contracts or through a hedging program, and the hedges are the key to understanding the 2026 and 2027 numbers: it has sold roughly 8,985 gigawatt-hours for 2026 at about CAD 66 per megawatt-hour and 6,631 gigawatt-hours for 2027 at about CAD 64. The rest of its output is exposed to market prices, and the company estimates that a CAD 1 per megawatt-hour move shifts 2026 EBITDA by about CAD 1.5 million for the remainder of the year, which gives you some sense of scale.

It has been busy. TransAlta is buying two contracted Colorado gas plants, Mountain Peak and Canyon Peak (318 MW), for about USD 1 billion including USD 750 million of project debt, expected to close in the early fourth quarter of 2026. It funded part of that by issuing 18.23 million shares at CAD 19.20, about CAD 350 million, in June, and the stock now trades below that price, at around CAD 18.80. That is a small example of why equity issuance deserves attention: each acquisition looks sensible on a megawatt basis, but an acquisition funded with new shares only helps existing holders if the cash flow it adds per share exceeds the dilution. Free cash flow per share guidance for 2026 is CAD 1.18 to 1.51, below 2025’s CAD 1.73, so a portfolio that has grown is producing less per share this year.

TransAlta raised its dividend by 8% for 2026, to CAD 0.28 a year, the seventh consecutive increase. But the yield is only about 1.5% and the payout is about 22% of free cash flow, which tells me this is not an income stock. The investment case is capital appreciation from contracts, hedges and the possibility that data-centre demand adds to contracted earnings. I would treat that angle as upside rather than the base case. What TransAlta has signed is a non-binding memorandum of understanding with CPP Investments and Brookfield for a data-centre development at Keephills, contemplating an initial power purchase agreement of about 230 MW and up to 1 GW of load, subject to regulatory approvals and definitive agreements. That is a framework, not a contract, and it is a different thing from the signed supply agreement Capital Power has with Meta. The credit is where the stock is clearly different from every regulated name: S&P rates it BB+ and revised the outlook to negative on July 24, 2026, Moody’s has it at Ba1, and adjusted net debt to EBITDA was 4.3 times at June 30. At about 15 times free cash flow I do not find that cheap for a sub-investment-grade credit, and this is one of the two stocks I put at the top of the risk list.

Northland Power: contracted, but still a construction story

Northland builds and owns renewable power, with offshore wind its centre of gravity. Its major projects are Baltic Power, a 1.1 GW offshore wind farm in Poland that the company says is on track for commercial operation in the second half of 2026, and Hai Long, a 1.0 GW offshore project in Taiwan with 71 of 73 turbines installed and commercial operation expected in 2027. Both are backed by long-term contracts. A high-quality contract does not, however, eliminate construction risk, financing risk, wind-resource risk or execution risk, and Northland is the stock in the group that shows how long a contracted renewable developer can be a construction story rather than a cash-flow story. On October 7 the company announced that installation of all 76 Baltic Power turbines is complete, with more than one-third of the turbines already generating electricity. That reduces one element of construction risk, but it does not eliminate commissioning, commercial-operation, financing or operating risk.

The dividend history makes the point. In November 2025, with its third-quarter results, Northland cut its dividend from CAD 1.20 to CAD 0.72 a year, effective with the January 2026 payment, and the stock fell by more than 20%. Guidance for 2026 is for adjusted EBITDA of CAD 1.45 billion to CAD 1.65 billion and free cash flow of CAD 1.05 to CAD 1.25 a share, against which the new dividend represents a payout of about 63%. Under the old dividend the same free cash flow would have implied a payout of roughly 104%, which is why the cut happened. The lower payout is more sustainable, and I think the cut was the right decision. But free cash flow per share in the second quarter was CAD 0.09 against CAD 0.22 a year earlier, which I read as the cost of carrying projects not yet earning their full return, and the funding model is not proven until Baltic Power and Hai Long actually deliver. At around CAD 22 it trades at roughly 19 to 20 times free cash flow, which is not a distressed multiple. The yield of about 3.2% is not compelling on its own, and a stock whose returns rest on projects reaching commercial operation on time should not be mistaken for a defensive utility. I rank it as the second of the two highest-risk names, with the caveat that the upside from successful completion is real.

Algonquin Power & Utilities: a turnaround, not a bargain

Algonquin is no longer the sprawling renewables-and-utilities growth story many Canadian investors remember. After selling much of its renewable energy business, it is becoming primarily a regulated U.S. utility, with electric, gas and water operations in a number of states, typical allowed returns around 9.75% on equity ratios above 50% (CalPeco’s recent decision is one example), and pending rate requests that include EnergyNorth at 10.25% and Empire’s Arkansas request at 10%.

The dividend history is the story, and it has been understated in some accounts. Algonquin cut its dividend twice, not once. In January 2023 the quarterly dividend was reduced by 40%, from USD 0.1808 to USD 0.1085, and the dividend reinvestment plan was suspended. In August 2024 it was cut by another 40%, to USD 0.065. The cumulative reduction is about 64%. The dividend now stands at USD 0.26 a year, a yield of about 5.1%, and a payout of about 72% of the midpoint of 2026 adjusted earnings guidance of USD 0.35 to USD 0.37, rising to USD 0.38 to USD 0.42 in 2027. The company expects no equity issuance through 2027, the balance sheet is repaired, and the stock trades at about 14 times earnings.

Why the discount, then? The credit cushion is thin: the company’s own presentation shows cash flow relative to debt (on S&P’s measure) of about 11.9% for the twelve months to June 30, against 12.8% for 2025 and an estimated BBB downgrade threshold of about 11%, which leaves less than a percentage point of room. S&P rates the parent BBB with a stable outlook. Pending rate cases will determine how much of the allowed returns it actually earns. And in August the company announced plans to redomicile to the United States, reportedly by continuing into Delaware, with its headquarters moving to Chicago and a shareholder vote expected in the first half of 2027. The company points to reduced cross-border tax inefficiencies, but it also says the redomicile is expected to be taxable in Canada and subject to a U.S. toll charge, and it has not laid out what that will cost. A move from a Canadian to a U.S. corporation may change how dividends are taxed for Canadian shareholders, and the rules differ by account type, which makes it a topic for a separate analysis rather than a paragraph here. The investment question is whether this is now a cheap regulated utility or a damaged utility that deserves its discount, and I think the discount is partly earned. I treat it as a turnaround, not a core holding.

Brookfield Renewable: a utility, or a platform that owns power assets?

Brookfield Renewable owns hydro, wind, solar and storage assets around the world, and an investment in Westinghouse, the nuclear services business, which it reports as a financial asset rather than as an operating business of its own. For the purposes of this article, the units listed on the TSX as BEP.UN and the exchangeable shares listed as BEPC represent the same underlying business and I count them once. The company has proposed simplifying them into a single Canadian corporation, a British Columbia company to be called Brookfield Renewable Partners Inc., with one ticker and a one-for-one exchange. Brookfield and its affiliates would hold about 47% of the new company’s Class A shares, according to the management information circular. I am not going to say anything here about timing of the votes or about how registered accounts such as TFSAs and RRSPs will be treated afterwards, because I have not been able to confirm those details from the company’s primary documents, and the structure is exactly the kind where an assumption can be costly.

The business is better understood through FFO, which is how Brookfield reports. Funds from operations per unit was USD 2.14 over the trailing twelve months and analysts expect about USD 2.24 for 2026, which puts the units at 13 to 14 times FFO, with a distribution of USD 1.568 a year (up 5.1%) and a yield of about 5.3%. The payout is about 70% of FFO. Management targets distribution growth of 5 to 9% a year, FFO per unit rose 10% in 2025 to USD 2.01, and recent quarters have been strong, with FFO per unit up about 15% in the first quarter and 11% in the second.

The caveats are real. FFO is before maintenance capital spending, which flatters it compared with AFFO. The growth depends on buying and developing assets, and on selling mature ones at good prices, a practice called capital recycling that works when markets are open and falters when they are not. Brookfield issues equity continuously through an at-the-market program (nearly 6 million exchangeable shares in the first half of 2026 for about USD 237 million), so per-unit growth is lower than company-wide growth. DBRS rates the company BBB(high). Most of its borrowing is non-recourse debt at the asset level, and it reported about USD 5.1 billion of available liquidity at June 30, 2026. My view is that Brookfield Renewable is better understood as a renewable infrastructure investment platform than as a conventional regulated utility. That is why it deserves a different valuation and a different level of risk. For the right investor that is a feature rather than a flaw. I would just not hold it for the same reasons I would hold Hydro One.

AltaGas: a utility multiple on cyclical earnings?

AltaGas owns regulated gas utilities in the United States, midstream infrastructure in Canada, and a propane (LPG) export business built around export terminals. It is included here because it sits between a conventional utility and something like Enbridge, and I would not give it the same defensive label as Hydro One or Fortis.

The numbers show both sides. Utility rate base is growing fast, about 10% in 2026 and 8% a year through 2030, and the midstream business is performing strongly: second-quarter normalized EBITDA was CAD 391 million, of which utilities contributed CAD 142 million and midstream CAD 285 million, up 33% year over year. Full-year 2026 guidance is for normalized EBITDA of CAD 2.0 billion to CAD 2.1 billion and normalized earnings of CAD 2.35 to CAD 2.60 a share. Leverage of about 4.4 times is a bit below the company’s own 4.5 to 5.0 target. The dividend, CAD 1.336 a year after a 6% increase, yields roughly 2.4% and represents a payout of about 54%.

The qualification is the export business. Record exports of 144,000 barrels a day and about 91% of the remaining 2026 volumes being tolled or hedged at about USD 21.81 a barrel have helped results, but management itself says midstream results benefited from historically high global export spreads and physical-sale premiums, and historically high is rarely a description of a permanent condition. The Reef project has slipped to before the end of the first quarter of 2027 at about CAD 1.5 billion, up about 12%. The valuation has risen with the results: at about 22 times the midpoint of 2026 guidance the stock has re-rated materially from its recent historical valuation, and its yield has been pushed down to about 2.4%. That is the problem I keep coming back to. Does the combination of utility stability and midstream growth deserve a premium, or are investors paying a utility multiple for earnings that depend on a spread cycle? I think the answer is closer to the second than the first, and the stock looks fairly valued to me at best.

Enbridge: the benchmark

Enbridge is in this article deliberately and is not a utility. It is the energy-infrastructure benchmark. A Canadian income investor weighing utilities can reasonably ask a blunt question: if what I want is dependable cash flow and a growing dividend, why wouldn’t I just buy Enbridge? It is a fair challenge, and answering it is the quickest way to understand what the utilities are and are not offering.

The business has four parts. Liquids pipelines, including the Mainline that carries most Western Canadian crude, produced about half of second-quarter adjusted EBITDA of CAD 4.78 billion (CAD 2.34 billion). Gas transmission contributed about 30% (CAD 1.42 billion), regulated gas distribution and storage about 18% (CAD 878 million), and renewable power only about 3%. The third segment is the one that has made Enbridge more utility-like. In 2023 it agreed to buy three U.S. gas utilities (East Ohio, Questar and Public Service of North Carolina) from Dominion Energy for USD 14 billion, made up of USD 9.4 billion in cash and USD 4.6 billion of assumed debt at announcement, and it closed the three purchases between March and September 2024. Together with Enbridge Gas Ontario, that gives it a substantial regulated gas distribution business. It is still fundamentally an energy-infrastructure company, though, and the large majority of the business is exposed to volumes of oil and gas, to pipeline permitting and to politics in a way that Fortis and Hydro One are not. The Mainline’s tolls partly escalate with U.S. inflation and power costs, which helps, but it is an indexation mechanism, not a regulated allowed return.

For valuation, price to earnings is the wrong tool: Enbridge’s depreciation and non-cash items distort earnings, which is why the company reports distributable cash flow. At roughly CAD 66.50, the shares trade at about 11.3 times the CAD 5.90 midpoint of 2026 guided DCF per share (guidance is CAD 5.70 to CAD 6.10), a DCF yield of about 8.9%. On adjusted earnings of CAD 3.02 it is about 22 times, which looks expensive on its face but is the wrong lens for this business; the case for Enbridge rests on cash flow, not on earnings. The dividend is CAD 3.88 (a quarterly CAD 0.97, up 3%), a yield of about 5.8%, covered with a payout of about 66% of DCF, and it has risen for 31 consecutive years. Management reaffirmed its 2026 guidance and expects growth of approximately 5% a year in EBITDA, DCF per share and earnings per share after 2026, backed by a secured growth backlog of approximately CAD 41 billion. Leverage is the weak spot: debt to EBITDA was 5.1 times at the second quarter (4.8 times at year-end, with the difference partly the exchange rate) against a target of 4.5 to 5.0 times. Ratings are BBB+ at S&P and Fitch, Baa2 at Moody’s and A(low) at DBRS.

So why not just own Enbridge? For current income, I think it is a legitimate answer, and arguably the best one in this article. But it is not a substitute for the regulatory purity of Fortis or Hydro One. It brings pipeline and volume exposure, permitting and political risk, higher leverage, and slower per-share growth, and what it gives you in exchange is a yield roughly double Hydro One’s and about 2.4 percentage points above Fortis’s. [INTERNAL LINK: Enbridge / Canadian energy infrastructure article, if available]

Canadian utility stocks compared

Company	What you’re buying	Yield	Growth profile	Valuation	Balance sheet	Main risk	Best for
Fortis	Nine regulated utilities, about 65% U.S. assets	~3.4%	Rate base ~7% a year, ~4 to 6% dividend growth	~21x earnings, somewhat above its recent norm	Strong	Rich price, U.S. rate cases	Long-term holding, dividend growth
Emera (with Canadian Utilities)	Florida-centred regulated utilities, Alberta being added	~4.5%	Rate base 7 to 8% (pro forma, not the same as EPS growth), EPS target 5 to 7%, dividend 1 to 2%	~18x forward earnings	Below average	Dilution, integration, credit	Higher yield with more execution risk
Hydro One	Ontario transmission and distribution	~2.8%	EPS 6 to 8% a year, no equity	~21 to 22x earnings	Strongest	One province, one regulator, next rate period	Per-share growth and balance sheet
Capital Power	Gas-heavy power generation, Alberta and U.S.	~4.4%	AFFO/share target 8 to 10%, dividend 2 to 4%	~10 to 11x guided AFFO (normalization unclear)	Below average (BBB-)	Merchant power, AFFO normalization	Value-oriented investors who accept power-price risk
TransAlta	Hydro, wind, gas, Alberta and U.S.	~1.5%	FCF/share guided down in 2026	~15x free cash flow	Weak (BB+, negative outlook)	Power prices, leverage, issuance	Growth-oriented, high risk tolerance
Northland Power	Contracted offshore wind and renewables	~3.2%	Project-completion dependent	~19 to 20x free cash flow	Funding-intensive	Construction and funding	High risk, completion-dependent upside
Algonquin	Regulated U.S. utilities, turnaround	~5.1%	EPS guided to USD 0.38 to 0.42 in 2027, dividend flat	~14x earnings	Below average, thin cushion	Thin credit cushion, redomicile	Turnaround investors
Brookfield Renewable	Global renewables platform	~5.3%	Distribution growth target 5 to 9%, FFO/unit growing	~13 to 14x FFO	Average	Capital-markets dependence, structure	Investors comfortable with complexity
AltaGas	Gas utilities plus LPG exports and midstream	~2.4%	Rate base ~10% in 2026, spread-aided earnings	~22x earnings	Average	Cyclical export spreads	Hybrid exposure, not defensive
Enbridge	Pipelines, gas utilities	~5.8%	~5% a year after 2026 (EBITDA, DCF/share, EPS)	~11x DCF	Average (5.1x debt/EBITDA)	Volumes, leverage, politics	Current income

Which Canadian utility stock offers the best value?

My answer is Enbridge first and Capital Power second, with an important qualification: none of these stocks is obvious deep value. The utilities as a group trade near or above where they have typically traded in recent years, and several, Fortis, AltaGas and Enbridge on earnings, have re-rated materially. The question is which is least expensive for the risk.

Enbridge wins because it combines a cash-flow multiple of roughly 11 times DCF, a yield near 5.8% on a dividend covered about one and a half times, an investment-grade credit and a cash-flow valuation that looks reasonable rather than stretched. The caveats are that it is not cheap on earnings, at about 22 times, and that 5.1 times debt to EBITDA is not conservative. Capital Power finishes second. It offers a higher cash-flow yield on paper, roughly 9.4% of market capitalization in guided AFFO against about 8.9% for Enbridge’s DCF, potentially more upside if power prices and its growth plan cooperate, and a dividend payout below 50%. AFFO and DCF are not identical measures, so I would not treat the spread between them as bond-like precision, but the gap is modest for a credit that is two notches lower, with tax-credit benefits that haven’t been quantified and a merchant tail. The margin of safety is thinner than the headline multiple suggests.

Algonquin is the stock most likely to appear cheap on a screen, at about 14 times earnings and a yield above 5%, and I would not mistake that for value. The discount reflects two dividend cuts, a narrow credit cushion and an unresolved corporate move. A low multiple is not the same as value.

Which Canadian utility stock has the best dividend?

I do not think one ranking can answer this, because “best dividend” means three different things.

The best overall dividend is Fortis. Fifty-two consecutive annual increases, a payout around 70% of adjusted earnings, a strong investment-grade credit and growth guidance of 4 to 6% a year make it the most dependable combination of record, coverage and growth in the group. The cost is a yield of about 3.4%.

The best dividend quality and growth after Fortis is Hydro One. A payout near 60%, the strongest balance sheet in the group, growth of about 6% a year and no need to issue shares make the dividend well covered and growing. The cost is a current yield of only about 2.8%, which makes it more of a long-term compounding story than an income one.

The best current income is Enbridge, with a yield of about 5.8%, a payout around 66% of DCF and 31 consecutive annual increases. The costs are slower dividend growth, about 3%, and greater leverage than the regulated utilities.

Yield by itself would give a different list: Enbridge, Brookfield Renewable and Algonquin at the top, each above 5%, and TransAlta, AltaGas and Hydro One at the bottom. The first three include the two companies with the most complicated dividend histories or structures in the group. High yield and dividend quality are not the same thing, and in this group they point in opposite directions fairly often.

Which Canadian utility stock has the best long-term growth?

Hydro One comes first, and the reason is confidence rather than size. Its growth is regulated, funded without issuing shares and guided to 6 to 8% a year, so what it earns in rate base reaches the person who owns a share. Brookfield Renewable comes second. The level of potential growth is higher, and it has been delivering, with FFO per unit up 11 to 15% in the first half of 2026, but it depends on development, asset sales at good prices and open capital markets, and some of the growth is shared with the shareholders who are buying new shares through its issuance program. It is the more uncertain of the two.

Fortis deserves an honourable mention because its rate-base growth of about 7% is funded without new equity and runs through a plan with visibility to 2030, though asset sales and the reinvestment plan trim the per-share result. Capital Power’s target of 8 to 10% a year in AFFO per share is the most ambitious in the group, but it starts from a lowered base, depends on acquisitions and power prices, and is the sort of target I would watch for evidence rather than assume. Emera’s 7 to 8% rate-base growth and its 5 to 7% earnings-per-share target are different measures, and the Canadian Utilities and ATCO deal will bring a large number of new shares, which is the kind of arithmetic that makes rate-base growth a poor guide to what an existing shareholder will own.

Which Canadian utility stocks are the highest risk?

TransAlta and Northland Power. TransAlta combines merchant power-price exposure, a sub-investment-grade credit with a negative outlook, equity issued in June at a price above where the stock now trades and a 2026 free cash flow guide that is lower per share than 2025. Northland combines construction and commissioning risk on very large offshore projects with a dividend that has already been cut once and a funding model that is not proven until those projects start earning. Algonquin deserves an honourable mention as a turnaround with a thin credit cushion and a pending change of domicile.

Risk and expected return are separate questions. A company that goes right from here, TransAlta by realizing contract and data-centre value, or Northland by completing its wind farms, may well outperform the more conservative names. What the label means is that the range of outcomes is wide and the dividend is not what you are buying.

If I could own only one: Fortis, narrowly, over Hydro One

If I had to choose a single Canadian utility to hold for ten years or more, I would choose Fortis, and I would choose it narrowly over Hydro One. The case rests on diversification. Fortis operates in five Canadian provinces, ten U.S. states and the Cayman Islands, under many different regulators, so no single decision can alter the company’s trajectory. It has raised its dividend for 52 years. Its credit is strong, its capital plan is funded without meaningful new equity, and the plan gives visibility out to 2030. For a holding I expect to ignore for long stretches, I value that kind of resilience more than any single year of better growth.

I want to be honest about the price. Fortis is not the value winner. Its yield is toward the low end of its recent range, and its earnings multiple is somewhat above its recent norm. The company I would be most comfortable owning for a decade is not the stock I think is cheapest today, and if I could not accept the possibility of years of middling returns while the valuation normalizes, I would not pretend otherwise. The valuation argues for patience about when to buy, not for a different answer about what to own.

Hydro One is the runner-up and the margin is thin. It has the stronger balance sheet, better near-term per-share growth and no expected equity issuance. What holds it back is concentration: one province, one regulator and a provincial government that owns roughly 47% of the company and has its own interests in electricity prices, and a guidance horizon that ends in 2027 just before the next regulatory period. If the Ontario Energy Board’s decision on the 2028 to 2032 application is constructive, the gap between the two could close or reverse, and a weak outcome for Fortis in a major jurisdiction like Arizona would have a similar effect. Neither of the other candidates comes close. Emera has the higher yield and the higher variance, with a BBB- credit, an 84% payout, 1 to 2% dividend growth and an acquisition that issues a large number of new shares and has yet to show its per-share result. Brookfield Renewable has the highest potential return, but its structure and tax treatment are in flux, and it depends on capital markets. Capital Power is a power-price story. Enbridge remains the alternative for someone who prioritizes current income over regulatory purity.

Category	#1	#2 / Alternative
Value	Enbridge	Capital Power
Dividend	Fortis	Hydro One (quality and growth); Enbridge (current income)
Growth	Hydro One	Brookfield Renewable
One 10+ year holding	Fortis	Hydro One
Highest risk	TransAlta	Northland Power

The real lesson: Canadian utilities are not one asset class

An investor choosing among these ten companies is deciding between regulated monopolies, independent power producers, renewable development platforms, utility and midstream hybrids, and energy infrastructure. The right choice depends on what you want: stability, dividend growth, current income, value or long-term growth. The same company can be the answer to one of those questions and the wrong answer to another, which is why Fortis tops the single-holding list while Enbridge tops the value list and Hydro One tops growth.

The thread through all of it is the point I started with. Rate-base growth and billion-dollar capital plans do not matter by themselves. Per-share growth does. Hydro One earns its place because its current plan converts rate-base growth into per-share growth unusually cleanly. Fortis also converts asset growth into shareholder growth relatively efficiently, though asset sales, financing and DRIP issuance create some leakage. Emera is spending more and issuing more, and the arithmetic of its largest deal shows why that distinction matters. Brookfield Renewable and Capital Power ask you to accept that their growth will outrun their financing needs, which is possible but needs to be watched. In a group where the headlines are usually about size, the question that tells you the most is how much more each share will own at the end.

[INTERNAL LINK: relevant Sovereign Canadian dividend investing article]