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The Safest 4%+ Dividend on the Entire TSX? Here’s the Pick
Canadian Utilities (TSX: CU)
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Canadian Utilities had a quiet but positive week, edging higher and trading right near its 52-week high. The story remains all about steady dividends, low volatility, and modest but reliable growth – classic “lazy investor” material.
Key Metrics
Metric | Value | Why it matters |
|---|---|---|
Share Price | $42.21 | As of Monday’s close |
Weekly Move (5-day) | +0.9% | Slow and steady climb |
Market Cap | $8.2B USD | Mid-cap regulated utility |
P/E (TTM) | 21.6 | Not cheap, but typical for a defensive utility |
Forward P/E | 16.9 | Valuation improves on forward earnings |
52-Week Range | $33.19 – $42.95 | Trading ~98% of 52-week high – strong momentum |
YTD Return | 27.2% | Big year for such a low-beta stock |
Forward Dividend Yield | 4.3% | Attractive for TFSA income |
Payout Ratio | 93.2% | Most earnings paid out – income > growth |
Factor Scores & Style Snapshot
Factor | Score | Takeaway |
|---|---|---|
Value Score | 67/100 | Reasonable value for a quality utility |
Growth Score | 69/100 | Better growth than you’d expect from a sleepy utility |
Quality Score | 71/100 | Solid margins & regulated assets |
Sentiment Score | 83/100 | Markets like CU right now |
Beta (1-year) | 0.06 | Extremely low volatility – defensive holding |
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Analyst Insights (HOLD, Dividend-Focused Name)
Analysts see Canadian Utilities as fairly valued right now, with the dividend as the main attraction rather than big upside.
Item | Detail |
|---|---|
Consensus Rating | HOLD |
Average Target Price | $41.83 |
Current Price | $42.21 |
Implied Upside | -0.89% (essentially fully valued) |
Analyst Breakdown (6 total) | ⭐ Strong Buy: 0 • ✅ Buy: 0 • 😐 Hold: 6 • ❌ Sell: 0 • 🚫 Strong Sell: 0 |
Interpretation:
Wall Street isn’t bearish – they just see limited price upside from here.
For lazy TFSA investors, that’s fine: the thesis is “collect the 4%+ yield and small dividend raises,” not hyper growth.
“Recent Developments” – What the Data Is Telling Us This Week
The Stock Rover news link you provided requires interactive access, so I can’t pull the exact headline text from that page.
However, based on the current metrics and estimate trends, here’s what this week’s picture looks like:
Shares Hovering Near 52-Week Highs
Price is ~98% of the 52-week high, and 27% above the 52-week low.
Combined with a strong 1-month return of +8.7%, that suggests continued buying interest in defensive yield names.
Estimates Edging Up, Not Exploding
Current year EPS growth estimate: +1.6%
Next year EPS growth estimate: +3.4%
Over the last 30–90 days, EPS estimates for 2025/2026 have ticked slightly higher, signaling steady, not spectacular growth.
Dividend Story Remains Intact
Forward yield: 4.3%
Dividend growth: about +1% per year over 1, 3, and 5 years.
This week’s pricing action (near highs) shows investors are still willing to pay up for reliable income, even with modest growth.
Growth Indicators – Slow but Durable
Growth Metric | Value | Comment |
|---|---|---|
Sales Growth Next Year | +3.2% | Typical for a regulated utility – inflation-plus growth |
Sales 5-Year Avg | +2.4% | Stable revenue base over time |
EPS Growth Next Year | +3.4% | Earnings growing slightly faster than sales |
5-Year EPS Growth Estimate | +42.0% | Long-term compounding from rate base growth & efficiency |
EBITDA Growth (1-year) | +6.9% | Healthy underlying cash flow improvement |
EBITDA 5-Year Avg | +3.3% | Steady, utility-style growth |
Takeaway:
This is not a high-octane growth stock. It’s a regulated, slow-and-steady compounder where the 4.3% yield + low-single-digit EPS growth do most of the heavy lifting.
Dividend Profile – TFSA-Friendly Passive Income
Dividend Metric | Value | Why TFSA investors care |
|---|---|---|
Forward Yield | 4.3% | Attractive starting yield for long-term income |
Payout Ratio | 93.2% | High – most earnings are paid out to shareholders |
Div. 1-Year Growth | +1.0% | Small but consistent raise |
Div. 3- & 5-Year Avg Growth | +1.0% / year | Very slow, but extremely dependable |
Ex-Dividend Date | Nov 6, 2025 | Useful for planning TFSA buys around distributions |
For a “lazy investor” TFSA strategy:
CU works best as a core income anchor, not a growth rocket.
You’re effectively trading big upside for stability + yield.
Risk & Quality Check
Leverage: Debt/Equity 1.7 – typical for a utility, but means it’s sensitive to interest rates.
Coverage: Interest coverage 2.6x – comfortable but not ultra-conservative.
Margins:
Operating margin: 33.2%
Net margin: 16.5%
Volatility: Beta 0.06 – almost bond-like in terms of volatility.
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Bottom Line
For “Lazy Investor: This Dividend-Growth Stock Deserves a Permanent Place in Your TFSA”:
Pros:
4.3% forward yield, long history of paying & slowly raising the dividend
Ultra-low volatility – ideal for retirees and conservative TFSA investors
Steady EPS & cash flow growth, backed by regulated assets
Cons:
Limited capital gains upside (target price slightly below current)
High payout ratio limits how fast the dividend can grow
Growth is modest vs. broader market
The Wealth Awesome Team