The Globe and Mail reports in its Wednesday, Oct. 7, edition that on Sept. 29 Fortis ($37.43)
raised its dividend by 10.3 per
cent to $1.50 a share annually
from $1.36. The Globe's John Heinzl writes in the Yield Hog column that the stock now yields 4 per cent.
Mr. Heinzl recommended Fortis on Jan. 19 and April 8 when it was worth $39.20 and $39.23. When the Globe writer first bought Fortis the annual dividend
was $1.20 a share. Fortis has since elevated its
dividend four times. The
new dividend represents
an increase of 25 per cent over
the original amount. Mr. Heinzl is so confident Fortis
will continue to boost it payout that he plans to buy more shares. He expects Fortis to deliver
dividend hikes in excess of
the rate of inflation. Mr. Heinzl is reinvesting all of his dividends with the intention of spending the cash from
Fortis sometime in retirement.
He warns that a spike
in interest rates
could hurt shares of Fortis and
other utilities. However, while stock
prices are notoriously unpredictable
in the short term, Mr. Heinzl is confident
that in the long run --
whether it is five, 10 or 20 years
from now -- Fortis's dividend
will be substantially higher than
it is today.
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