Then and Now – Fortis
Welcome to another Then and Now post, a continuation of my series where I revisit some older blogposts and either rip them to shreds (because my thinking has changed on such subjects) or I’ll confirm my position on various personal finance topics or specific investments.
You can check out my previous posts in this series here:
Today’s post is about a Canadian dividend paying stud I’ve owned for many years now: Fortis (FTS).
Then
- I started writing about this stock some seven-plus years ago. You can see where I’ve referenced Fortis in these older articles here:
Beyond Fortis, here are some equities built to last in your portfolio.
These are some stocks that have rewarded shareholders for generations.
- In 2009, I was transitioning out of big bank mutual funds and I started looking at various Canadian dividend paying stocks to buy and hold. Fortis was one of them. I bought some. I found the dividend history of Fortis, like other stocks I owned in my early DIY portfolio very appealing. I still do!
- In mid-2011, I recall buying more Fortis between $30-$31 per share. The dividend payment back in mid-2011 was $1.16 per year or $0.29 per quarter.
- Like other blue-chip Canadian stocks, I was buying FTS because I found many Canadian broad market ETFs (examples include but not limited to XIC, VCN, VCE, ZCN) and Canadian dividend ETFs (such as VDY, XIU, among others) owned this stock and had done so for years as part of the top market-weighted holding. Look at this post and you’ll see some other companies in this theme such as Canadian banks and pipelines.
Now
- At the time of this post, the stock is now trading just over $42 per share. Just so you know, for investors that would have bought and held this stock since 2005, their share price would have doubled to date. I missed that by a few years! Oh yeah, you would have doubled your dividend income as well during the same period.
- I have no intention of selling this stock. Buy and hold and reinvest all dividends paid to earn more shares commission-free every quarter.
When it comes to investing, boring can work wonders.
Dividends are increasing every month thanks to one of these stocks.
I’m optimistic our basket of Canadian and U.S. stocks, along with some low-cost ETFs, will continue to grow over time so we can reach semi-retirement in the coming 5-10 years. Only time will tell if we are right. 🙂
What are your thoughts about my approach to buy and hold Fortis? Do you own Fortis directly or via an ETF? What are some of your favourite stocks to buy and hold? Thanks for reading and sharing.
Mark
My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I'm looking to start semi-retirement soon, sooner than most. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.
A few years ago there was no Tesla. No GM electric cars. Now most vehicle manufacturers plan to jump into the electric car movement. (China in a big way!). Thus- more electricity will be needed (and fast!). Ontario will lag behind (thanks Mr,Ford) but California and other States will be needing more electricity. Fortis is looking pretty good – to pick up some of this demand. Lots of growth to come – and – I see rates increasing much higher with inflation and higher interest rates.
I agree Mike, re: rates will increase, inflation will increase, etc. Fortis is a long-term hold as are other utilities for me with the demand for electricity increasing over time.
Lovely series, Mark!
I have been a FTS holder for a long time and actually recently added a few more shares. It’s one of my favourite Canadian dividend paying stocks.
Great to hear from you GYM. Thanks for the kind words. Hope you’re having a great summer. Yes, happy FTS shareholder too 🙂
Sorry guys, I was speaking more in general terms, not specific to FTS (but they will certainly be affected by a serious downturn as well). I know the “but it’s different this time” has been trotted out a bazillion times in the past but I really do think a lot of things *are* different this time. From China emerging as a power house, to the weakening United States, to climate change, to just people in general, I think we’re in for a radical change in the ways things have been in the past. I’m not convinced that the globe will see economic growth as we have in the past 80 years. I certainly hope for it to continue for my lifetime, but I can’t see it lasting.
I would agree to some extent. Global growth will slowdown over time. When, I don’t know. I just need another 40-50 years myself 🙂
You’re right radical change is already happening now and its the pace of change that is remarkable. Much evidence of this and some interesting books on it- I recall Thomas Friedmans Thank you for being late.
No economist here by any means but I’m not sure that means we won’t have growth though as technology is bringing enormous efficiencies. My guess is much less growth in developed countries and enormous growth in more impoverished and developing parts of the world. How that affects working people exactly and how many more humans the earth can sustain remains to be seen.
I also think a considerable part of the growth we’ve had especially in more recent times seems to be brought on by enormous government and consumer debt & corporate, QE, manipulating of currencies etc that seems artificial to me and at some point needs to correct. That’s my concern.
Not sure if this is along the same lines as you’re thinking Lloyd.
Yup, that’s basically it. Throw in food supply issues, trade/tariff issues, mass migration issues, polarization within countries, global climate issues, etc etc and I don’t see a lot of positives. In fact, I can’t think of one positive off the top of my head.
Not to be a Debbie Downer but where do people see all this continued growth coming from? Don’t get me wrong, I love the idea of perpetual growth, but is it realistic? I just don’t see the potential for a continuance of what we’ve seen nor do I see any driver of continued expansion.
If you are asking Trudeau, he would say “immigration”
For Fortis, I see growth from acquisitions over time. Also, higher rates passed onto customers. Immigration to Canada will be a driver too. Utilities will be needed for the foreseeable future.
Lloyd, not sure if you mean earnings, stock value or dividends; I believe all of which go hand in hand over time.
Since we’re talking about Fortis its doubled its size in the last 5 yrs with 3 regulated utility acquisitions in the US. Biggest utility in Canada and top 15 in the US. Now 60% revenue from US. .8% anualized growth. Record earnings over 1B. 44 yrs strong dividend growth. Population and electric demand is growing, as well as infrasture needs in other developing countries. Fortis are obviously shrewd operators if they don’t overextend themselves (us) and/or interest rates don’t skyrocket.
I think that’s the answer- acquisitions and probably some organic growth as electric takes over some from fossil fuels. Will it contine? I dunno but so far its a pretty good story and utilities are probably going to stay in demand for my lifetime as well as anything else I can think of. However, I doubt very much the pace of growth will continue at anywhere near the same levels. I consider this in my plans, and I know you’re golden with yours. You’ve got a little bigger stake in this company than I do at this time so good luck to all of us.
Mark: By re-investing the dividends (full not synthetic) of Fortis and several others I’ve owned for at least 10 years, the reinvested shares now equal 30% to 35% of the original shares bought.
@Leo: FTS should increase in Dec.
Agreed. Another 5%+ hike coming in 3 months.
I do own fortis for a number of years now. It’s always exciting to know that you will get paid every three months. It’s even better when you are waiting to hear about the dividend increase.
I have just over 800 shares in my RRSP. Don’t plan to add other than through the DRIP.
We own a few hundred, not quite 800, DRIPping away synthetically every quarter obtaining 6 shares commission free.
nice Mark.
Dont own it but might in the future.
very cool post, love hearing about the past and what people bought it at and how the dividend has multiplied so much.
Gonna check your others out now.
keep it up
Please do! Let me know if you have any questions 🙂
All my Fortis are under water. I might add more if price went down more.
I’m underwater on several things that I bought more recently myself. Probably going to be way underwater on many in the next dip. Not worried at all and trying to buy more on buying opportunities. Focused primarily on cash flow and then the cap gains long game.
You’ll be good May. Set your targets and keep alerts up to date!
Me too. Majorly utilities and pipelines. My problem is that I began to pay attention to investment too late. Well, better late than never. I still have quite some cash at hand that needs to be invested.
You must have purchased recently. I wouldn’t worry about that at all. A great time to buy!
Yes, since last summer. I am more hesitating to buy now than last summer. The longer we are in this bull market, the more possible a market down in near future.
Canadian Tire has a big down past few days. Looking at that one to buy.
May: With good companies , Watch the Income growth not the price!
Thanks. That’s what I am trying to focus on.
Nothing wrong with established companies on sale 🙂
Yeah, Fortis will be a long term hold for me too, and I drip this within my TFSA.
Sounds like a plan.
i too have owned shares in fortis for a long time. i will continue to hold it and may purchase more in the very near future.
I don’t intend to sell anytime soon that’s for sure!