Written by Amy Legate-Wolfe at The Motley Fool Canada
Some dividend stocks help you sleep better than others, and that’s just a fact. They simply don’t ask investors to make big leaps of faith. Instead, they tend to run essential businesses, throw off dependable cash flow, and hold up even when markets get noisy. In 2026, that kind of calm matters. Interest-rate hopes can shift fast, economic growth can wobble, and investors still want income they can count on. That makes these steady utilities bargain buys.
Hydro One (TSX:H) is about as boring as a dividend stock gets, and that’s exactly the charm. It owns and operates electricity transmission and distribution assets across Ontario, so demand does not swing wildly with consumer moods. Over the last year, Hydro One kept landing projects tied to grid growth, including work on priority transmission lines between Bowmanville and the GTA, plus new lines tied to Greenstone and Sudbury to Barrie. That gives it a nice mix of present income and future expansion.
The latest earnings were solid. In 2025, Hydro One reported revenue of $9 billion, up from $8.5 billion in 2024, while net income attributable to common shareholders rose to $1.34 billion from $1.16 billion. Basic earnings per share (EPS) climbed to $2.23 from $1.93. It also kept investing heavily, with $3.37 billion in capital spending in 2025 and $2.9 billion of assets placed in service. Those are not sleepy numbers for a sleepy dividend stock.
The dividend still looks dependable rather than flashy. Hydro One declared a quarterly dividend of $0.3331 per share in February, which works out to about $1.33 annually so the yield sits near 2.4% at writing, and the shares trade at about 25.5 times 2025 earnings. That valuation is not cheap, so this is not the kind of stock you buy for a sudden bargain pop. You buy it because Ontario keeps needing more power, more grid reliability, and more transmission buildout, and Hydro One keeps showing up in the middle of that story.
ATCO (TSX:ACO.X) brings a slightly different kind of comfort. It’s not just one utility, but has regulated utilities, modular structures, logistics, and energy infrastructure exposure through its broader group. That adds a few more moving parts, but it also gives ATCO more than one path to growth. Over the last year, one of the biggest developments was progress on the Yellowhead Pipeline Project in Alberta, which won major regulatory approval and remains on track for construction to start in 2026 if final approvals line up.
Its earnings gave investors a fairly steady picture, even if IFRS results looked messy. ATCO reported 2025 adjusted earnings of $518 million, or $4.61 per share, up from $481 million, or $4.29 per share, in 2024. Fourth-quarter adjusted earnings rose to $154 million from $146 million. The weaker IFRS result came from non-cash impairments and writeoffs, not a collapse in the core business. In fact, Canadian Utilities alone spent $1.6 billion in capital expenditures in 2025, with 94% aimed at regulated utilities in ATCO Energy Systems and ATCO Australia.
Leave a comment