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I’d Put $7,000 in This Canadian Income Legend Without Hesitation

Dividend investment stands out as one of the most effective methods for earning additional income with minimal effort. Investors in the Canadian stock market have numerous dividend-paying options available should they decide to build their own self-managed portfolio aimed at generating such returns.

passive income

Building a reliable dividend portfolio to meet your financial objectives requires ample time, discipline, and wise decisions.

There is an abundance of dividend stocks available in Canada; however, it’s crucial to bear in mind that not all dividend stocks are equal. When

investing in dividend stocks

, you should meticulously select equity securities from companies with strong fundamentals that can easily finance distributions and increase them consistently.

A stock with an outstanding history of disbursing payments to shareholders and boosting these distributions annually is dependable for producing consistent passive income that not only matches but also outpaces inflation. In this regard, a renowned Canadian dividend stalwart ought to form a core component of every self-managed investment portfolio focused on the stock market.

That legendary Canadian dividend story is

Fortis

 (

TSX:FTS

) and here’s why this stock should be the cornerstone of your passive-income portfolio.

Fortis and its past performance history

With a market capitalization of $32.90 billion, Fortis is a major player owning and operating various utility transmission and distribution facilities across both Canada and the U.S. The company serves more than 3.5 million customers with electricity and natural gas utilities. Additionally, Fortis holds minor interests in numerous utility companies located in the Caribbean region.

When it comes to reliability as a business, this company seems to have all the advantages. Nearly 100% of their assets function within heavily regulated market environments. About 93% of these assets are involved in the relatively safe sectors of transmission and distribution. This allows the firm’s operational strategy to produce consistent and foreseeable financial inflows. Consequently, they can finance their capital projects with ease, undisturbed by volatility in commodity costs or shifts in broader economic conditions impacting earnings.

The firm continually commits resources to enhancing both safety protocols and operational effectiveness. By broadening its rate base, it manages to boost income—a factor contributing to its consistent capability of providing shareholder distributions reliably. Furthermore, this positions Fortis well to elevate its payment amounts. Given this track record, it’s noteworthy that Fortis has successfully raised its payments over five decades.

Fortis’ strong financial health has enabled its shares to provide shareholders with an average annual return exceeding 10% over the past twenty years. This year, the company plans to invest approximately $1.4 billion and is expected to meet its target of spending $5.2 billion on capital expenditures to expand its regulated asset base.

The firm appears strongly set to keep boosting payments for the coming years.

Foolish takeaway

At present, the stock price of Fortis stands at $65.90 per share, marking an increase of 26.27% since hitting its lowest point over the past year. The company offers a dividend yield of 3.73%. Lowering interest rates have alleviated some financial pressures on the firm; previously, these high-interest burdens led to drops in share values as the business was heavily indebted. Anticipating additional reductions in interest rates later this year, Fortis’s stock could experience another rise in share prices, particularly considering its resource-demanding operational needs.

If you’re searching for a strong base to establish your dividend income portfolio, Fortis stock is an excellent choice. Constructing this type of portfolio with Fortis should be at the top of your list.

Tax-Free Savings Account

Will even allow you to benefit from all the earnings without facing any taxes on the dividends or capital gains generated from your investments in stocks.

The post

I wouldn’t hesitate for a moment to invest $7,000 in this top-tier Canadian income stock.

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  I’d Look at These 5 Stocks for a $10,000 Canadian Dividend Portfolio
  
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  The Most Intelligent Utility Stock to Purchase with $6,400 at This Moment
  

Fool contributor

Adam Othman

does not hold any shares in the stocks discussed. The Motley Fool suggests investing in Fortis. The Motley Fool has a

disclosure policy

.