5 Canadian utility stocks to buy

 Investors sensitive to risk often look for certain stocks that are less exposed to market fluctuations. Focusing on sectors, for instance, utility, which is less cyclical, can help investors identify such stocks.

Besides safeguarding from adverse market situations, utility stocks also provide dividend income. Even some Canadian utility companies are providing clean power produced from renewable energy to fuel the green energy transition.

Here are five TSX utility stocks that investors can look into for stable growth in the long run.


TransAlta Corporation (TSX: TA)


TransAlta recently rebranded its visual identity, including its logo and tagline, on June 20 to encapsulate its focus on a ‘carbon-neutral future’. The utility company doles out dividends every quarter (C$ 0.05 per share due on July 1).

TransAlta reported increased revenue of C$ 735 million in Q1 FY2022, higher than C$ 642 million in the same period a year ago. The power producer significantly improved on the net income front with a profit of C$ 186 million attributable to shareholders in the latest quarter compared to a loss of C$ 30 million posted in Q1 2021.

Hydro One Limited (TSX: H)


Hydro One is in agreement with First Nations communities to construct a ‘future’ electricity power grid in northwest Ontario. The electricity provider reported C$ 1.03 billion in revenues, net of purchased power, compared to C$ 917 million in Q1 2021.

Hydro One’s return on equity (ROE) was over nine per cent, denoting its financial profitability based on shareholders’ equity.


Capital Power Corporation (TSX: CPX)


Capital Power renewed its electricity purchase agreement (EPA) with BC Hydro on May 16 for its Island Generation site for 4.5 years. On July 29, Capital Power will disburse a quarterly dividend of C$ 0.547 per share.

Though its revenue and other income plummeted to C$ 501 million in Q1 2022, the utility firm posted an increased net profit of C$ 119 million in the latest quarter compared to C$ 101 million in Q1 2021. 


Boralex Inc (TSX: BLX)


Boralex said its power production surged by three per cent year-over-year (YoY) in the quarter that ended on March 31, 2022. The power generator reported a 21 per cent rise in its revenues from energy sales and premium feed-in to C$ 227 million in Q1 2022. Further, its net profit improved by 17 per cent YoY to C$ 57 million in the latest quarter.


Canadian Utilities Limited (TSX: CU)


Canadian Utilities invested C$ 263 million in capital projects in Q1 FY2022. Out of this total investment, regulated utilities account for 83 per cent, while energy infrastructure accounts for 17 per cent.

Canadian Utilities posted C$ 227 million in earnings attributable to equity owners in Q1 2022 compared to C$ 141 million in the first three months of 2021. This TSX utility company also held a dividend yield of almost five per cent.


Bottomline


In addition to safety from market instability, these TSX utility stocks offer exposure to the green energy transition by making efforts toward carbon neutrality. Dividend income is another key advantage passive income investors generally look for while investing.

Location: Canada

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