With 44 consecutive years of dividend increases, this is one of Canada’s most reliable income stocks.

The Maritimes-based utility has also expanded across North America with a series of strategic acquisitions. Now it is focused on improving the efficiency and reliability of its extensive operations. In the meantime, it offers a high 4.0% dividend yield.

FORTIS INC.  (Toronto symbol FTS; www.fortisinc.com) is the main supplier of electrical power in Newfoundland and Labrador as well as PEI.

To cut its reliance on Atlantic Canada, Fortis has expanded to other parts of Canada and the U.S.

In June 2013, it paid $1.5 billion U.S. for CH Energy Group. It distributes electricity and gas in the Mid-Hudson River Valley of New York State. In August 2014, Fortis purchased UNS Energy for $4.5 billion. This firm operates power plants and distributes electricity and gas in Arizona.

In October 2016, Fortis paid $7.0 billion U.S. in cash and shares for ITC Holdings Corp. That firm owns 25,100 kilometres of high-voltage power lines in the U.S. Midwest. Including ITC’s $4.8 billion U.S. debt, the total purchase price was $11.8 billion U.S. Fortis later sold 19.9% of ITC to Singapore’s sovereign wealth fund for $1.2 billion U.S.

Fortis now plans to focus on improving the reliability and efficiency of its operations instead of pursuing more acquisitions. Between 2018 and 2022, it plans to spend $14.5 billion on capital projects. That’s up $1.5 billion from its earlier plan.

The plan includes spending $1 billion U.S. on a new underwater transmission line under Lake Erie. They would connect the electrical power systems of Ontario to those in the northeastern U.S. That two-way line will make it easier for electricity producers in both regions to trade excess power.

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Due to its most recent acquisitions, Fortis’s long-term debt (as of December 31, 2017) was $20.7 billion. That’s equal to 1.2 times its market cap. However, regulated operations now account for 97% of its assets, and their predictable cash flows will let it pay down the debt over the next few years.

Fortis’s earnings in the three months ended December 31, 2017, fell 29.1%, to $134 million from $189 million a year earlier. Due to more shares outstanding, earnings per share dropped 34.7%, to $0.32 from $0.49. The lower earnings are mainly because changes to the U.S. tax code forced the company to write down various tax credits (which it can use to cut its future tax bill) by $146 million.

If you exclude all unusual items, earnings per share declined 10.1%, to $0.62 from $0.69. However, revenue rose 2.8%, to $2.11 billion from $2.05 billion.

In October 2017 the company raised its quarterly dividend by 6.25%, to $0.425 a share from $0.40. The new annual rate of $1.70 yields a high 4.0%. Fortis has now increased its dividend each year for the past 44 years. It plans to raise that annual payment by about 6% each year through 2022.

Fortis will likely earn $2.55 a share in 2018. The stock trades at a reasonable 16.1 times that estimate.

Recommendation in TSI Dividend Advisor: Fortis is a buy.

For our recent report on a U.S. dividend stock that has prospered with takeovers, read This stock’s strategic acquisitions sustain growth, dividends.

For our views on a group of the most reliable dividend stocks for Canadians, read The Best Bank Stocks for Dividends: Knowing the Big Five.