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Best Canadian Utility Stocks and ETFs for 2025

Colin Graves Freelance Writer

Updated Apr 2, 2025

Looking for steady income and stability in a shaky market? Canadian utility stocks deliver essential services, reliable dividends and long-term growth potential. Whether you want to protect your portfolio or build passive income, these top picks can help you invest with confidence in 2025.

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Best Canadian utility stocks to buy

In 2025, many Canadian investors are looking for ways to protect their portfolios from a potential market downturn.

One option is to increase your holdings in defensive stocks that offer stability in just about any market. For many, utility stocks fit the bill. Utility companies deliver critical services to Canadians and benefit from the stability of a highly regulated industry.  

But with so many options, how do you know which stocks to buy? Here are 10 top Canadian utility stocks in Canada. 

  • Market cap

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    You look at market cap — short for market capitalization — to understand the size of a company and the kind of risk and growth potential it brings to your portfolio.

    Market cap = Share Price × Total Shares Outstanding

    It’s a quick way to measure what the market thinks a company is worth.

    Large-cap stocks are more stable, carry lower risk and provide steady dividends.

    Mid-cap stocks offer balance between growth and stability but are more volatile than large-cap (with some updside).

    Small-cap stocks have enormous growth potential which of course carries higher risk.

    In short, market cap gives you a snapshot of a company’s size, risk level, and role in your portfolio. It helps you stay diversified and aligned with your investing goals.

  • Dividend yield

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    Dividend yield tells you how much cash a company pays out in dividends each year, relative to its share price. It’s expressed as a percentage:

    Dividend Yield = Annual Dividend ÷ Share Price

    It helps you measure how much income you’ll earn for every dollar you invest.

    A high yield (5% or more) could mean the stock has great income potential but might be a red flag if the payout isn't sustainable. Typically, a high dividend yield is reserved for mature or undervalued companies. Be mindful, a high dividend on an undervalued company could also mean they're trying to inject capital investments and not re-investing in the business for growth.

    A low yield (under 3%) may suggest lower income for you, but strong potential for growth as companies reinvest profits into expansion.

  • P/E ratio

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    The P/E ratio — short for price-to-earnings ratio — shows how much investors are willing to pay for a company’s earnings.

    You calculate it by dividing the stock price by the company’s earnings per share (EPS).

    P/E ratio = Share Price ÷ Earnings Per Share

    A high P/E can mean the stock is expensive — or that investors expect strong growth whereas a low P/E might suggest the stock is undervalued — or that the company’s in trouble.

    The average P/E ratio varies by sector and market conditions, but here's a general rule of thumb:

    Overall market average (TSX or S&P 500): ~15 to 20

    Utility sector average: Typically lower, around 15 to 18, since utilities are considered stable but slow-growing

    If a utility stock has a P/E above 18, investors might be expecting strong growth or pricing in low risk.

    A P/E below 15 could mean the stock is undervalued — or facing headwinds.

    Always compare a stock’s P/E to others in the same industry. A low P/E isn’t automatically a bargain, and a high one isn’t always overpriced. Context is everything.

In short, market cap gives you a snapshot of a company’s size, risk level, and role in your portfolio. It helps you stay diversified and aligned with your investing goals.

Top 10 Canadian utility stocks for stability and dividends

  • 1. Fortis Inc. (TSX:FTS)| Market cap: $31.23B | Yield: 3.93% | P/E ratio: 19.38

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    St.John’s, Newfoundland-based Fortis Inc. is an electric and gas utility holding company. Operating in Canada, the US and the Caribbean, it has a diverse portfolio of regulated electricity and natural gas assets, making it an outstanding defensive stock. The company has consistently paid and increased its dividend, and its ongoing commitment to clean energy and renewable power makes it an excellent long-term pick.

  • 2. Canadian Utilities Ltd. (TSX:CU) | Market cap: $6.95B | Yield: 5.40% | P/E ratio: 21.68

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    Calgary-based Canadian Utilities is a global energy infrastructure company. Its business operates across four segments, including ATCO Energy Systems, ATCO EnPower and ATCO Australia. The company’s focus on the creation and storage of renewable energy makes it a compelling option for investors concerned with sustainable growth, while its regulated business model makes it an attractive defensive stock. Like most other companies on this list, Canadian Utilities has a long history of dividend increases.

  • 3. Hydro One (TSX:H) | Market cap: $26.96B | Yield: 2.79% | P/E ratio: 23.76

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    Ontario-based Hydro One is one of Canada’s largest electricity transmission and distribution providers. It’s highly regulated and operates as a monopoly in Ontario, with exclusive transmission and distribution rights. In recent years, the company has invested heavily in its technology, including grid modernization, which delivers more reliability to customers. Consider Hydro One as a solid long-term holding if you’re looking for a defensive stock that pays a consistent dividend.

  • 4. Emera Inc. (TSX:EMA) | Market cap: $16.5B | Yield: 5.20% | P/E ratio: 25.08

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    Emera is an energy and services company with a diverse geographic footprint. Interests include Florida Electric Utility, Nova Scotia Power Inc. and New Mexico Gas Company, Inc., among others. The company is focused on electricity generation as well as electricity and gas transmission and distribution. It’s shifting from high-carbon to low-carbon energy sources, having reduced its use of coal in generation by 77% since 2005. Its attractive dividend yield and ongoing investment in regulated utilities will appeal to income investors.

  • 5. Brookfield Renewable Corp. (TSX:BEPC) | Market cap: $6.85B | Yield 5.61% | P/E ratio: 41.86

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    Brookfield Renewable Corp. operates hydroelectric, wind, solar and storage facilities in North and South America, Europe and Asia. Its global diversification makes it attractive as a defensive stock, while the company’s focus on expanding its renewable energy footprint provides opportunities for growth-focused investors.

  • 6. Northland Power Inc. (TSX:NPI) | Market cap: $4.49B | Yield: 6.95% | P/E ratio: -29.61

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    Northland Power Inc. owns and operates various sustainable power projects, including offshore wind, solar and natural gas. The company is a leader in the transition toward clean energy, which offers strong growth potential. With assets spread across North America, Europe and Asia, investors can be somewhat sheltered from the risks associated with regional economic challenges. The stock pays an attractive dividend yield close to 7%.

  • 7. AltaGas (TSX:ALA) | Market cap: $10.31B | Yield: 3.64% | P/E ratio: 20.87

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    AltaGas is a Calgary-based energy infrastructure company that deals in power generation and natural gas distribution. It also focuses on the transition to renewable energy. Its business is well diversified, making it less sensitive to market volatility. The company’s long-term strategy includes a plan to leverage its access to global markets; it owns two Liquified Petroleum Gas (LPG) export terminals and a prospective development terminal.

  • 8. Brookfield Infrastructure Partners L.P. (TSX:BIP.UN) | Market cap: $21.56B | Yield: 5.19% | P/E ratio: 557.08

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    Brookfield Infrastructure once operated under Brookfield Asset Management until it was spun off in 2008 (Brookfield Asset Management maintains a 30% ownership in BIP). The limited partnership owns and operates “premium infrastructure assets” with solid cash flows and high growth potential. This includes utilities, transport and renewable power. If you’re looking for a pure-play global infrastructure utility stock, you’ll want to consider BIP.

  • 9. Capital Power Corporation (TSX:CPX) | Market cap: $7.41B | Yield: 4.90% | P/E ratio: 12.83

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    Edmonton-based Capital Power is a growth-oriented power producer. The stable and regulated revenue streams it delivers from its power generation facilities offer defensive qualities, but it’s also focused on growth through the allocation of capital towards clean energy projects. It offers a solid dividend yield for income-focused investors.

  • 10. Algonquin Power & Utilities Corp (TSX:AQN) | Market cap: $5.04B | Yield: 5.68% | P/E ratio: 9.49

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    Algonquin Power & Utilities is an international generation, transmission and distribution company. Based in Ontario, Algonquin owns and operates regulated natural gas, electric, water distribution and wastewater collection utility systems and transmission operations in Canada, the US, Bermuda and Chile. The company is focused on both organic growth and growth through strategic acquisitions while still offering an attractive dividend yield.

Canadian utility stock prices today

Tab through their ticker symbols to see the different sock prices over days, months and years. 

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What are utility stocks?

Utility stocks represent shares of companies that provide critical services, such as electricity, natural gas, water and renewable energy. Utility stocks are considered defensive stocks because, unlike other sectors, people need their services regardless of how the economy performs. This tends to make utility stocks less vulnerable to market downturns. 

Electricity: Electricity companies can be involved in the generation, transmission and distribution of electricity from various power sources, including hydroelectric, nuclear, wind, etc. Leading Canadian electric utilities include names like Hydro One, Fortis Inc. and Emera Inc. 

Natural gas: Natural gas companies extract, process, distribute and sell natural gas to residential, commercial and industrial customers. Not all companies will participate in all stages of the supply chain. Upstream companies, such as Canadian Natural Resources Limited, are primarily involved in the exploration and production of natural gas. Downstream companies, such as FortisBC and Parkland Fuel Corporation, are more focused on providing natural gas to end users. 

Water: Water utilities are involved in the treatment, distribution and management of clean drinking water. They also collect and treat wastewater. Canada doesn’t have a true national water utility, as most water service providers operate on a provincial or municipal level. 

Renewable energy: Renewable energy utilities generate electricity from natural sources, such as sunlight (solar power), wind (wind power), the earth (geothermal power) and flowing water (hydropower), and deliver it to Canadian homes and businesses across the power grid. Brookfield Renewable Partners and Northland Power are examples of Canadian renewable energy utilities. 

Why invest in Canadian utility stocks?

✅ Canadian utility stocks offer lower volatility than other sectors because they provide essential services, such as electricity, water and natural gas, which are always in high demand, regardless of how the economy is faring. 

Investors can expect stable dividends and predictable cash flow, due to the highly regulated nature of the utilities sector. The utilities industry also has a high barrier to entry, so the chances of a new company entering and disrupting the sector is highly unlikely.

❌ That said, there are risks to investing in utility stocks. For one, they are highly sensitive to changes in interest rates. This is because their investments are capital-intensive, which means that companies must rely heavily on debt financing. 

Utilities can also be susceptible to changes in government regulations involving pricing or environmental standards. As with any stock, you should always invest with a long-term mindset. 

Dividend investors will typically look for utility stocks with long dividend growth streaks, an attractive dividend yield, and a healthy dividend payout ratio, among other things.

With that in mind, two Canadian utility stocks stand out. Fortis (FTS) is a Dividend Aristocrat, boasting one of the longest dividend growth streaks of any Canadian company at 51 years, a solid dividend yield of 3.98% and a 74.60% dividend payout ratio that’s lower than the industry average. 

In Canada, a Dividend Aristocrat is any company that pays a dividend to investors for at least five consecutive years. 

Canadian Utilities (CU) is another compelling choice for dividend investors. Its dividend yield of 5.43% is higher than Fortis's, and it’s also a Dividend Aristocrat with a dividend growth streak of 52 years. Its dividend payout ratio is higher than the industry average, but it’s a stable defensive stock that delivers cash flow and steady dividends to investors.

Passive index investors can invest in utility stocks and achieve sector diversification by opting for a Canadian utility ETF. Here are a few examples:

Details
BMO ​​Equal Weight Utilities Index 
Global X Canadian Utility Services High Dividend Index ETF
iShares S&P/TSX Capped Utilities Index ETF 
Ticker symbol
ZUT
UTIL
XUT
Total assets 
$496.5M
$18M
$365.4M
Dividend yield
4.26%
4.92%
3.87%
Management Expense Ratio (MER)
0.61%
0.61%
0.61%
Number of stocks
14
13
15
Benchmark
Solactive Equal Weight Canada Utilities Index
Solactive Canadian Utility Services High Dividend Index
S&P/TSX Capped Utilities Index
Top 3 holdings
TransAlta, Capital Power Corp, Emera
Emera, Enbridge, Telus Corp
Fortis, Brookfield Infrastructure Partners, Emera
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Unless you have a well-diversified portfolio of individual stocks, you’re likely better off getting your utility exposure through an ETF for its simplicity. The ETFs listed above hold 13 to 15 of the top dividend-paying utility stocks in Canada, and all pay an attractive dividend yield. You will pay an MER, but at around 0.61%, it’s reasonable for a sector ETF. 

How to choose the right utility stock for your portfolio

When selecting an income-focused utility stock for your portfolio, you’ll want to consider several factors, including dividend safety, earnings growth and regulation risks. You’ll also want to compare growth-focused vs. income-focused picks. 

Factor What to look for Why it matters
Dividend safety Payout ratio under 75%, steady earnings, strong free cash flow, manageable debt. Shows the company can keep paying dividends — even during downturns.
Earnings growth Consistent revenue and profit growth, especially over multiple years. Growth fuels long-term returns and can lead to higher future dividends.
Regulation risks Stable regulatory environment, clear government policies, low political interference. Utilities are heavily regulated—any changes can impact pricing, profits or operations.
Growth vs income Growth stocks reinvest in expansion; income stocks prioritize high, stable dividends. Helps match the stock to your goals — whether you want cash flow now or growth over time.

Are utility stocks a good investment right now?

Utility stocks are a solid defensive pick for Canadian investors who are concerned about a potential market downturn in 2025. There continues to be solid demand for essential services that utilities provide, and recent interest rate cuts should reduce borrowing costs for these companies. Also, growth opportunities continue to exist in renewable energy and infrastructure.

That said, keep an eye on interest rates. If the US government follows through on its threat of tariffs, it could lead to a spike in inflation, which could send interest rates higher once again. If this happens, it could have a negative impact on utility stocks.

Should you buy Canadian utility stocks?

Canadian utility stocks can be a good addition to a well-diversified investment portfolio. Utilities provide essential services to Canadians and can generate predictable cash flow in a highly regulated sector, even in a lousy economy.   

Many Canadian utilities are geographically diversified, with projects and operations spanning multiple continents. And most have a long track record of paying dividends, which is a big plus for income-focused investors.  

Whether you invest in individual stocks or ETFs, plan to hold utilities for the long term. The easiest way to invest is through an online brokerage. There are many options, but if you’re looking for the lowest cost, consider National Bank Direct Brokerage (NBDB), Wealthsimple or Questrade all of which offer commission-free stock and ETF trades. If you're an advanced trader, check out TD Direct Investing. 

FAQs

  • What are the best utility stocks to buy?

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    If your goal is to own a stable stock that generates cash flow and a reliable dividend, then you may want to consider names like Fortis, Emera or Canadian Utilities, all of which have long histories of paying dividends. If you’re looking for a utility stock with growth potential, Brookfield Renewable Corp is a leader in renewable energy and continues to invest in new renewable projects. And Northland Power is also focused on international expansion, which may open new revenue streams.

  • Are utility stocks recession-proof?

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    Utility stocks are not 100% recession-proof, but they can be resilient during an economic downturn due to the fact that utilities provide an essential service and are highly regulated by the government. They also tend to pay high dividends, even during recessions. But they aren’t without risk. Utility companies tend to carry a lot of debt due to the capital required to fund costly infrastructure projects. This can be a problem when interest rates rise.

  • What is the difference between energy and utility stocks?

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    Energy stocks tend to be more volatile than utility stocks, with earnings that fluctuate based on the supply and demand for global oil and gas. Utilities provide essential services in a highly regulated industry and, as such, generate steady and predictable revenue. They also tend to pay attractive dividends.



Colin Graves Freelance Writer

Colin Graves is a Winnipeg-based financial writer and editor whose work has been featured in publications such as Time, MoneySense, MapleMoney, Retire Happy, The College Investor, and more. Before becoming a full-time writer, Colin was a bank manager for over 15 years.

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