[FTS] Fortis Thesis 2026: Regulated Utility Capex Drives 51-Year Dividend Track Record
Fortis Inc. (NYSE: FTS) FY2025 revenue ~C$12.5-13.2B (~$9-9.5B; +3-7%) with adj. EPS ~C$3.30-3.55 reflecting continued ~$26B aggregate FY2025-2029 capex plan deployment across 10 regulated utility subsidiaries (ITC Holdings + UNS Energy + FortisBC + Central Hudson Gas & Electric + selected various) plus selected ~7-9% rate base growth CAGR + selected continued ~99%+ regulated utility revenue mix under continued President + CEO David Hutchens (~5-year tenure since January 2020). One of North America's largest investor-owned regulated utility holding companies with operations across electric transmission + electric distribution + natural gas distribution in Canada + US + Caribbean. Founded 1885 as St. John's Electric Light Company in Newfoundland Canada (~140-year heritage); selected post-1996 Fortis Inc. holding company formation; selected post-2002 Toronto Stock Exchange + NYSE listing; selected post-2014 ~C$11.3B ITC Holdings acquisition; selected post-2016 ~C$4.5B UNS Energy acquisition. Headquartered in St. John's Newfoundland Canada; ~9,500+ employees globally with ~C$12.5-13.2B revenue. 10 regulated utility subsidiaries: ITC Holdings ~25%, UNS Energy ~20%, FortisBC ~15%, Central Hudson Gas & Electric ~10%, Newfoundland Power ~5%, FortisAlberta ~5%, FortisOntario ~5%, Maritime Electric ~3%, FortisTCI ~2%, Caribbean Utilities ~5%. ~$26B FY2025-2029 capex plan: ITC Holdings transmission ~$11B + UNS Energy Arizona ~$5B + FortisBC ~$3B + Central Hudson ~$2B + Canadian + US selected various ~$5B; ~$5.5B aggregate annual capex; ~7-9% rate base growth CAGR (~$33-35B FY2024 → ~$45-50B FY2029); FY2026 catalyst: continued capex deployment. President + CEO David Hutchens since January 2020 (~5-year tenure); CFO Jocelyn Perry. Capital return: ~C$2.45-2.60 annual dividend FY2025 (~+5-7% growth; ~51-year continuous dividend track post-1972 — selected one of longest continuous dividend tracks among Canadian utilities); modest opportunistic buybacks; aggregate capital return ~C$1.4-1.5B; investment-grade Baa3/A- credit rating. FY2026 thesis: ~$26B aggregate capex plan + ~7-9% rate base growth CAGR + ~51-year continuous dividend track + selected continued 10 regulated utility subsidiary contribution + selected post-2024 interest rate cycle moderation. Risks: regulatory disallowance, interest rate cycle, capital project execution, USD/CAD volatility, macro recession.
[FTS] Fortis Thesis 2026: Regulated Utility Capex Drives 51-Year Dividend Track Record
Key Takeaways
- Fortis Inc. (NYSE: FTS) FY2025 revenue
C$12.5-13.2B ($9-9.5B; +3-7% YoY) with adj. EPS ~C$3.30-3.55 reflecting continued ~$26B aggregate FY2025-2029 capex plan deployment across 10 regulated utility subsidiaries (ITC Holdings + UNS Energy + FortisBC + Central Hudson Gas & Electric + selected various) plus selected ~7-9% rate base growth CAGR + selected continued ~99%+ regulated utility revenue mix under continued President + CEO David Hutchens (~5-year tenure since January 2020; ex-UNS Energy CEO 2014-2020 + ex-various Tucson Electric Power roles + ~25-year industry career; succeeded Barry Perry 2014-January 2020 retired who led Fortis through post-2014 ITC Holdings ~$11.3B + post-2016 UNS Energy ~$4.5B integration). - Aggregate ~$26B FY2025-2029 capex plan: ~$26B aggregate FY2025-2029 capex plan deployment across 10 regulated utility subsidiaries; selected ~$5.5B aggregate annual capex; selected post-2024 ITC Holdings transmission capex acceleration + post-2024 UNS Energy Arizona generation transition + post-2024 selected various Canadian + US regulated utility capex; selected
7-9% rate base growth CAGR ($33-35B FY2024 → ~$45-50B FY2029). - 10 regulated utility subsidiaries: ITC Holdings (~25% revenue) + UNS Energy (Arizona ~20%) + FortisBC (British Columbia ~15%) + Central Hudson Gas & Electric (New York ~10%) + Newfoundland Power (~5%) + FortisAlberta (~5%) + FortisOntario (~5%) + Maritime Electric (Prince Edward Island ~3%) + FortisTCI (Turks + Caicos ~2%) + Caribbean Utilities (~5%); selected ~99%+ regulated utility revenue mix.
- Capital return: ~C$2.45-2.60 annual dividend FY2025 (~C$0.6125-0.65/quarter; selected post-2024 ~5-7% increase; selected ~51-year continuous dividend track post-1972 dividend initiation — selected one of selected longest continuous dividend tracks among Canadian utilities); selected modest opportunistic buybacks; ~C$1.4-1.5B aggregate FY2025 capital return; investment-grade Baa3/A- credit rating.
Company Background
Fortis Inc. (NYSE: FTS) is one of North America's largest investor-owned regulated utility holding companies with FY2025 revenue C$12.5-13.2B ($9-9.5B; +3-7% YoY) and adj. EPS ~C$3.30-3.55 reflecting continued ~$26B aggregate FY2025-2029 capex plan deployment across 10 regulated utility subsidiaries (ITC Holdings + UNS Energy + FortisBC + Central Hudson Gas & Electric + selected various) plus selected ~7-9% rate base growth CAGR. The company employs ~9,500+ globally with operations across electric transmission + electric distribution + natural gas distribution in Canada + US + Caribbean.
Founded 1885 as St. John's Electric Light Company in Newfoundland Canada (~140-year heritage; selected one of Canada's oldest continuing utilities); selected post-1996 Fortis Inc. holding company formation following selected various Newfoundland Power consolidation; selected post-2002 Toronto Stock Exchange + NYSE listing; selected post-2004 ~C$1.5B Aquila Networks Canada acquisition (selected major Alberta + British Columbia gas utility expansion); selected post-2010 ~C$1.4B Central Vermont Public Service acquisition; selected post-2012 ~C$1.5B CH Energy Group (Central Hudson Gas & Electric New York) acquisition; selected post-2014 ~C$11.3B ITC Holdings acquisition (selected major US transmission utility); selected post-2016 ~C$4.5B UNS Energy (Tucson Electric Power Arizona) acquisition; selected post-2020 David Hutchens CEO appointment + selected continued ~$26B aggregate FY2025-2029 capex plan execution.
Headquartered in St. John's Newfoundland Canada; ~9,500+ employees globally with ~C$12.5-13.2B revenue. 10 regulated utility subsidiaries: ITC Holdings (~25% revenue ~C$3-3.3B — selected major US transmission utility covering Michigan + Iowa + Minnesota + Wisconsin + Kansas + Missouri + Oklahoma); UNS Energy (~20% ~C$2.5-2.6B — Arizona Tucson Electric Power + UniSource Energy Services + selected various Arizona); FortisBC (~15% ~C$1.9-2.0B — British Columbia natural gas + electric); Central Hudson Gas & Electric (~10% ~C$1.3-1.4B — New York Hudson Valley); Newfoundland Power (~5% ~C$0.65B — Newfoundland Canada electric); FortisAlberta (~5% ~C$0.65B — Alberta Canada electric); FortisOntario (~5% ~C$0.65B — Ontario Canada electric); Maritime Electric (~3% ~C$0.4B — Prince Edward Island Canada electric); FortisTCI (~2% ~C$0.25B — Turks + Caicos electric); Caribbean Utilities (~5% ~C$0.65B — Cayman Islands electric). Selected ~99%+ regulated utility revenue mix; ~5M+ aggregate retail customers + selected various commercial + industrial.
President + CEO David Hutchens since January 2020 (~5-year tenure); succeeded Barry Perry (CEO 2014-January 2020 retired who led Fortis through post-2014 ITC Holdings ~$11.3B + post-2016 UNS Energy ~$4.5B integration); Hutchens ex-UNS Energy CEO 2014-2020 + ex-various Tucson Electric Power roles + ~25-year industry career. Hutchens' tenure marked by selected continued ~$26B FY2025-2029 capex plan execution + selected continued ~7-9% rate base growth CAGR + selected continued ~5-7% annual dividend growth. CFO Jocelyn Perry (since 2018; ex-Fortis VP Treasurer + selected various roles + ~20-year company career).
~$26B FY2025-2029 Aggregate Capex Plan
Fortis ~$26B aggregate FY2025-2029 capex plan represents selected primary growth driver:
- ITC Holdings transmission: ~$11B aggregate FY2025-2029 (selected major US transmission expansion supporting selected various interconnection + selected various)
- UNS Energy Arizona: ~$5B aggregate FY2025-2029 (selected Tucson Electric Power generation transition + transmission + distribution upgrades)
- FortisBC: ~$3B aggregate FY2025-2029 (selected British Columbia natural gas + electric infrastructure)
- Central Hudson Gas & Electric: ~$2B aggregate FY2025-2029 (selected New York Hudson Valley electric + gas)
- Selected various Canadian + US regulated utility: ~$5B aggregate FY2025-2029 (Newfoundland Power + FortisAlberta + FortisOntario + Maritime Electric + selected various)
- Annual capex: ~$5.5B aggregate
- Rate base growth CAGR:
7-9% ($33-35B FY2024 → ~$45-50B FY2029)
FY2026 catalyst: continued capex plan deployment + ~C$0.10-0.20 incremental annual EPS contribution.
Capital Return Framework
Fortis capital return policy targets selected ~5-7% annual dividend growth + ~99%+ regulated utility revenue:
- Ordinary dividend: ~C$2.45-2.60 annual FY2025 (~C$0.6125-0.65/quarter; selected post-2024 ~5-7% increase; selected ~51-year continuous dividend track post-1972 initiation)
- Buybacks: selected modest opportunistic buybacks
- Aggregate capital return: ~C$1.4-1.5B FY2025
- Dividend track: ~51-year continuous (selected one of selected longest continuous dividend tracks among Canadian utilities)
- Investment grade: Baa3/A- credit rating
FY2026 catalyst: continued dividend growth + capital deployment.
Risks
- Regulatory disallowance: continued FERC + selected various regulatory disallowance + selected various rate case execution
- Interest rate: continued post-2024 interest rate cycle + selected various
- Selected various capital project: continued ~$26B capex deployment + selected various execution
- Currency: USD/CAD volatility could compress USD-reported earnings
- Macro: continued macro recession could compress selected various commercial + industrial demand
Key Core Metrics
| Metric | FY2025 | FY2024 | FY2023 | FY2022 | FY2026 outlook |
|---|---|---|---|---|---|
| Revenue | C$12.5-13.2B | C$11.97B | C$11.04B | C$10.99B | C$13-14B |
| Adj. earnings | C$1.6-1.8B | C$1.55B | C$1.49B | C$1.30B | C$1.7-1.95B |
| Adj. EPS | C$3.30-3.55 | C$3.18 | C$3.10 | C$2.78 | C$3.50-3.85 |
| Rate base | C$36-38B | C$35B | C$32B | C$30B | C$39-42B |
| Capex | C$5.5B | C$5.0B | C$4.3B | C$4.0B | C$5.5B |
| Capital return | FY2025 | FY2024 | FY2026 outlook |
|---|---|---|---|
| Dividend | C$2.45-2.60 | C$2.32 | C$2.60-2.80 |
| Buybacks | modest | modest | modest |
| Total return | C$1.4-1.5B | C$1.3B | C$1.45-1.6B |
| ~51-year track | continuous | continuous | continuous (~52 years) |
Market Evaluation
Fortis trades at selected ~17-21x FY2026 P/E premium vs Canadian Utilities (~13-15x) + Hydro One (~17-20x) + Emera (~18-22x) + selected various US regulated utilities reflecting selected continued ~99%+ regulated utility revenue mix + selected ~$26B aggregate FY2025-2029 capex plan + selected ~51-year continuous dividend track + selected ~7-9% rate base growth CAGR. Selected re-rating catalysts include: (1) continued ~$26B capex plan deployment; (2) ~7-9% rate base growth CAGR; (3) ~51-year dividend track + ~5-7% annual growth; (4) selected continued ITC Holdings + UNS Energy + selected various subsidiary contribution; (5) post-2024 interest rate cycle moderation supporting selected continued utility valuation.
~51-Year Dividend Track Strategic Differentiation Deep Dive
Fortis ~51-year continuous dividend track post-1972 dividend initiation represents selected primary differentiation thesis vs Canadian + US regulated utility peers (Canadian Utilities + Hydro One + Emera + Northland Power + selected various). Selected continuous dividend increases since 1972 (~C$2.32 → C$2.45-2.60 FY2025; ~+5-7% annual growth) supported by selected ~99%+ regulated utility revenue mix providing selected stable earnings + cash flow visibility. Selected continued ~$26B aggregate FY2025-2029 capex plan deployment supports selected continued 7-9% rate base growth CAGR ($33-35B FY2024 → ~$45-50B FY2029) creating selected continued earnings + dividend growth visibility. Selected 10 regulated utility subsidiaries (ITC Holdings + UNS Energy + FortisBC + Central Hudson Gas & Electric + Newfoundland Power + FortisAlberta + FortisOntario + Maritime Electric + FortisTCI + Caribbean Utilities) provide selected geographic + regulatory diversification across Canada + US + Caribbean supporting selected continued earnings stability. FY2026 catalyst: continued capex plan deployment + ~C$0.10-0.20 incremental annual EPS contribution + ~+5-7% annual dividend growth.
FY2026 thesis: ~$26B aggregate capex plan + ~7-9% rate base growth CAGR + ~51-year continuous dividend track + selected continued 10 regulated utility subsidiary contribution + selected post-2024 interest rate cycle moderation.
