Thursday, January 14, 2010

Fortis powers dividend up

For the 37th consecutive year, Canada-based power distributor Fortis (FTS) has hiked their dividend. This increase came in at 7.7% from $0.26 to $0.28 per share.

This holding of mine represents a good example of how dividend increases and a timely purchase can add up to a profitable situation over time.

I purchased Fortis at an attractive price during the credit crisis and my adjusted cost base (ACB) is $21.73/share. Due to the fact that Fortis has been increasing their dividend regularly and that the share price has risen, my yield on cost (the yield that I am receiving on my intial investment) is 5.2% while the actual yield on Fortis shares today is only 3.9%. So someone purchasing Fortis shares today will receive 3.9% of their total investment in cash annually while I am garnering 5.2% of mine.


Think Dividends said...

With a 3.9% current yield, is Fortis a buy at current prices?

Anonymous said...

Payout ratio is very high. Share price has had a good run to near 52 week high. The stock is, maybe, at or near fully priced for the next while. Doesn't mean you should not buy it, just do not expect much upside for the next while(some downside could be expected). My 2 cents.

MG (moneygardener) said...

I wouldn't buy it at these prices.