3 High Yield Canadian Utility Stocks

Utility stocks have great appeal for income investors. They typically generate steady earnings year after year, and many utility stocks have recession-proof dividend payouts. Utilities usually conduct business in highly regulated markets, meaning their profits (and dividends) are more certain and predictable than many other market sectors.

Canadian utility stocks could be even more attractive, as many have higher yields and/or lower valuations than their U.S. based counterparts. This article will analyze 3 high-yielding Canadian utility stocks.

TransAlta Corporation (TAC)

TransAlta Corporation is an electric energy utility that is based in Calgary, Canada. It operates through the following operating segments: Hydro, Wind and Solar, Gas, Energy Transition, and Energy Marketing. Through these segments the company provides over 6,000 MW of combined power, with the bulk coming through Gas, and Wind and Solar. The company provides a range of traditional fossil fuel-based generation options, as well as renewable options.

It serves customers primarily in Canada, but also has a small business in the US, as well as Australia. TransAlta reports results in Canadian dollars but throughout this report, we use US dollars. The current translation rate is $0.71 USD for $1 CAD. The company generates about $2.1 billion in annual revenue.

TransAlta posted third quarter earnings on November 6th, 2025, and results were somewhat weak, and definitely remain quite volatile. The company noted revenue of $442 million, and fractional adjusted earnings. Operational availability fell from 94.5% a year ago to 92.7% in the most recent quarter. Adjusted EBITDA was $238 million, down from $315 million a year ago.

Free cash flow suffered as well, declining from $131 million to $105 million year-over-year. Adjusted earnings before taxes were $17 million, down sharply from $102 million a year ago. Cash flow from operating activities was $251 million, up from $229 million year-on-year.

TAC has increased its dividend for 6 consecutive years.

Fortis Inc. (FTS)

Fortis is Canada’s largest investor-owned utility business with operations in Canada, the United States, and the Caribbean. It is cross-listed in Toronto and New York. Fortis trades with a current after-tax yield of 3.0% (about 3.5% before the 15% withholding tax applied by the Canadian government). Fortis is virtually 100% regulated with ~82% regulated electric and ~17% regulated gas. As well, ~64% of its assets are in the U.S., ~33% in Canada, and ~3% in the Caribbean.

About 93% of its assets are for transmission and distribution of electricity or gas, which provide essential services, leading to resilient earnings through the economic cycle. Fortis reported Q3 2025 results on 11/04/25. For the quarter, its reported adjusted net earnings of CAD$441 million, up 5.0% versus Q3 2024, while adjusted net earnings-per-share (EPS) came in at C$0.87, up 2.4%.

The utility raised its quarterly dividend by 4.1% to C$0.64 per share, equating to an annualized payout of C$2.56 per share. It has a new capital investment plan of $28.8 billion for 2026 to 2030. The year-to-date results provide a bigger picture. Adjusted net earnings rose 9.4% to CAD$1.3 billion, while adjusted net EPS rose 7.3% to C$2.63. Capital spending year to date was C$4.2 billion, while the total capital investment for the year is now expected to be C$5.6 billion.

Canadian Utilities (CDUAF)

Canadian Utilities is a $8.14 billion company with approximately 5,000 employees. ATCO owns 53% of Canadian Utilities. Based in Alberta, Canadian Utilities is a diversified global energy infrastructure corporation delivering solutions in Electricity, Pipelines & Liquid, and Retail Energy.

The company prides itself on having Canada’s longest consecutive years of dividend increases, with a 53-year streak. Unless otherwise noted, US dollars are used in this research report.

On November 7th, 2025, Canadian Utilities posted its Q3 results for the period ending September 30th, 2025. Adjusted earnings were $76.7 million ($0.28 per share), up $4.3 million ($0.01 per share) year-over-year. Growth in adjusted earnings was driven primarily by continued rate base expansion in ATCO Energy Systems and higher approved rates in ATCO Gas Australia under the new AA6 regulatory period.

These positive factors were partially offset by the lower 2025 ROE, the completion of ECM funding recorded in the prior year, lower interest income, the timing of certain expenses, and the reduced earnings contribution from ATCO Energy following its transfer to ATCO in 2024.