Stock of the Day

Fortis (FTS)

$54.65

-$0.04 (-0.1%)

Market Cap: $28.21B

About Fortis

Fortis Inc. operates as an electric and gas utility company in Canada, the United States, and the Caribbean countries. It generates, transmits, and distributes electricity to approximately 447,000 retail customers in southeastern Arizona; and 103,000 retail customers in Arizona's Mohave and Santa Cruz counties with an aggregate capacity of 3,408 megawatts (MW), including 68 MW of solar capacity and 250 MV of wind capacity.

The company also sells wholesale electricity to other entities in the western United States; owns gas-fired and hydroelectric generating capacity totaling 65 MW; and distributes natural gas to approximately 1,087,000 residential, commercial, and industrial customers in British Columbia, Canada. In addition, it owns and operates the electricity distribution system that serves approximately 592,000 customers in southern and central Alberta; owns four hydroelectric generating facilities with a combined capacity of 225 MW; and provides operation, maintenance, and management services to five hydroelectric generating facilities. Further, the company distributes electricity in the island portion of Newfoundland and Labrador with an installed generating capacity of 145 MW; and on Prince Edward Island with a generating capacity of 90 MW. Additionally, it provides integrated electric utility service to approximately 69,000 customers in Ontario; approximately 275,000 customers in Newfoundland and Labrador; approximately 34,000 customers on Grand Cayman, Cayman Islands; and approximately 17,000 customers on certain islands in Turks and Caicos. It also holds long-term contracted generation assets in Belize consisting of 3 hydroelectric generating facilities with a combined capacity of 51 MW; and the Aitken Creek natural gas storage facility. It also owns and operates approximately 90,500 circuit Kilometers (km) of distribution lines; and approximately 51,600 km of natural gas pipelines. Fortis Inc. was founded in 1885 and is headquartered in St. John's, Canada.

Fortis Bull Case

Here are some ways that investors could benefit from investing in Fortis Inc.:

• Fortis Inc. offers a defensive investment profile with a beta of 0.42, which indicates that the stock is significantly less volatile than the broader market, making it a stable choice for investors seeking to reduce portfolio risk during periods of economic uncertainty.
• The company provides a consistent income stream through its dividend, with a current yield of 3.38% based on the stock price of $54.68, and a recent quarterly dividend payment of C$0.64 per share that was paid on September 1st, 2026.
• Fortis Inc. demonstrated strong operational performance in its most recent quarterly report on July 31st, 2026, where it reported earnings per share of $0.56, which exceeded the consensus estimate of $0.55, indicating that the company is managing its costs effectively despite revenue challenges.
• Analysts maintain a positive long-term outlook for the stock, with a consensus price target of $65.00, which represents a potential upside of approximately 19% from the current trading price of $54.68, suggesting that the market may be undervaluing the company's future growth potential.
• The company is preparing to release its third quarter 2026 financial results and a new five-year capital outlook for the period 2027-2031 on November 3, 2026, which may provide investors with fresh insights into its long-term strategic direction and capital allocation plans.

Fortis Bear Case

Investors should be bearish about investing in Fortis Inc. for these reasons:

• Fortis Inc. is currently trading at a price of $54.68, which is below its 200-day moving average of $55.99, suggesting that the stock is in a medium-term downtrend and may face further downward pressure in the near term.
• The company's revenue performance has been weak recently, with the most recent quarter showing revenue of $1.67 billion, which fell significantly short of the analyst consensus estimate of $1.83 billion, indicating potential challenges in generating top-line growth.
• Scotiabank recently cut its full-year 2026 earnings per share estimate for Fortis Inc. to $2.55 from a prior estimate of $2.63, reflecting a negative outlook on the company's near-term profitability and suggesting that analysts are becoming more cautious about its financial performance.
• The stock has a high debt-to-equity ratio of 1.27, which indicates that the company relies heavily on debt financing, potentially increasing its financial risk and interest expense burden, especially in a higher interest rate environment.
• Fortis Inc. has a high payout ratio of 73.68%, meaning it is distributing a large portion of its earnings as dividends, which may limit its ability to reinvest in growth projects or build a financial cushion for future uncertainties.

Recent News

• CCT Fortis Further Delays Circular on 2025 Convertible Bond Amendments (tipranks.com)
• Fortis Healthcare Subsidiary Takes 26% Stake in Captive Solar SPV to Cut Energy Costs (tipranks.com)