Every Tuesday we bring you “Best Canadian Stocks” from one of our three newsletters featuring Canadian stocks—The Successful Investor, Stock Pickers Digest and Canadian Wealth Advisor. Today, we take a look at conservative growth stocks: two power generators with high dividend yields are among the fastest growing stocks in our safety-first advisory, Canadian Wealth Advisor.

ALGONQUIN POWER & UTILITIES CORP. (Toronto symbol AQN; www.algonquinpower.com) has nearly tripled in size over the past three years through acquisitions. It plans to expand further with more purchases.

The company’s regulated utility businesses now provide water, electricity and natural gas to over 489,000 customers, up sharply from 120,000 three years ago. In addition, its hydroelectric, thermal energy, solar and wind facilities generate 1,150 megawatts, up from 460.

Emera (Toronto symbol EMA), a recommendation of The Successful Investor, our conservative growth advisory, owns 21.0% of Algonquin.

Algonquin’s revenue rose 11.3% in the three months ended March 31, 2015, to $381.9 million from $343.0 million a year earlier. Cash flow per share gained 5.1%, to $0.41 from $0.39. The first quarter is typically the company’s strongest, due to higher winds, rainfall and energy demand.

Growth by acquisition—particularly rapid growth—adds risk. But Algonquin cuts that risk by buying profitable utilities. It also ensures its renewable energy projects sell their power under long-term government-guaranteed contracts.

The stock trades at 10.6 times its forecast 2015 cash flow of $0.90 a share. The company is raising its quarterly dividend by 10.0% with the July 2015 payment, to $0.09625 U.S. from $0.0875. The shares yield 4.9%, based on the new rate.

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Canadian growth stocks: Innergex grows by building its own facilities rather than by acquisition

INNERGEX RENEWABLE ENERGY (Toronto symbol INE; www.innergex.com) operates 26 hydroelectric plants, six wind farms and one solar power facility in Quebec, Ontario, B.C. and Idaho. The company gets 73% of its power from hydroelectric plants. Wind supplies 26% and solar generates 1%.

Innergex is growing more slowly than Algonquin, largely by building its own hydroelectric and wind facilities, rather than adding by acquisition. Right now, the company has five projects under construction.

But like Algonquin, Innergex makes sure it has firm long-term power-purchase contracts in place before it starts building new plants.

In the three months ended March 31, 2015, Innergex’s revenue jumped 53.5%, to $57.7 million from $37.6 million a year earlier. Rainfall was well above average in the latest quarter and well below average in the year-ago period. Cash flow rose 61.5%, to $0.42 a share from $0.26.

The stock trades at 10.2 times Innergex’s forecast 2015 cash flow of $1.14 a share. It yields 5.3%.

Recommendation in Canadian Wealth Advisor: Both of these utilities are BUYS.