Fortis Inc. Announces Second Quarter Dividends – 2024
- None.
- None.
Insights
Dividend declarations are a critical component of a company's financial strategy, often reflecting its current profitability and future outlook. Fortis Inc.'s announcement of dividends across various series of preference shares and common shares indicates a stable cash flow position and a commitment to returning value to shareholders. The specified dividend rates for each series of shares reveal the company's capital structure and the hierarchy of shareholder remuneration.
The preference shares, with their fixed dividend rates, provide insights into the risk profile and expected returns for investors holding these types of securities. Preference shares typically appeal to investors seeking stable income with priority over common shareholders in the event of liquidation. The announcement of dividends, especially if consistent or increasing over time, can be a positive signal to the market, potentially affecting the company's stock price and investor sentiment.
Moreover, the designation of dividends as eligible dividends is notable for tax purposes. It allows shareholders to benefit from a federal and provincial dividend tax credit in Canada, enhancing the after-tax income for individual investors and potentially making Fortis' shares more attractive relative to those of companies that do not offer such tax advantages.
Understanding the tax implications of dividend income is crucial for both individual and institutional investors. The eligibility of Fortis Inc.'s dividends for the dividend tax credit means that Canadian residents will be taxed at a lower rate on these dividends compared to regular income, a factor that can influence investment decisions. For non-resident investors, it's important to note that different tax treaties and rates may apply, which can affect the net return on investment.
Corporations holding Fortis shares may also benefit from the Dividend Received Deduction, which can reduce taxable income. The tax-efficient nature of these dividends can make Fortis an attractive holding in various investment portfolios, potentially influencing the stock's demand and liquidity in the market.
The announcement of dividends can serve as a market signal, with various implications depending on the context. For Fortis Inc., a regular schedule of dividend payments can suggest stability and predictability, which are highly valued in the utility sector where Fortis operates. The utility industry is generally known for its defensive investment characteristics, with steady demand and regulated returns. This often translates to a consistent dividend policy, reinforcing the company's attractiveness to income-focused investors.
However, it is essential to analyze the dividend yield—the annual dividend payment divided by the stock's current price—to assess the attractiveness of Fortis' dividends relative to other investment opportunities. A high yield may indicate a good value, but it could also signal that the market perceives higher risk or that the stock price has recently fallen. Conversely, a low yield might reflect a relatively high stock price or investor confidence in the company's growth prospects.
This news release constitutes a "Designated News Release" incorporated by reference in the prospectus supplement dated September 19, 2023 to Fortis' short form base shelf prospectus dated November 21, 2022.
ST. JOHN'S, Newfoundland and Labrador, Feb. 08, 2024 (GLOBE NEWSWIRE) -- The Board of Directors of Fortis Inc. ("Fortis" or the "Corporation") (TSX/NYSE: FTS) has declared the following dividends payable on June 1, 2024 to the Shareholders of Record of the following Shares of the Corporation at the close of business on May 17, 2024:
$0.30 63 per share on the First Preference Shares, Series "F";$0.38 26875 per share on the First Preference Shares, Series "G";$0.11 469 per share on the First Preference Shares, Series "H";$0.40 8392 per share on the First Preference Shares, Series "I";$0.29 69 per share on the First Preference Shares, Series "J";$0.34 18125 per share on the First Preference Shares, Series "K", provided that if no such Series “K” shares are outstanding on such date as a result of the exercise of Shareholders of their right to convert Series “K” shares into Cumulative Redeemable Floating Rate First Preference Shares, Series “L” of the Corporation effective March 1, 2024 (the “Conversion Right”), no such dividend shall be payable;$0.44 62000 per share on the First Preference Shares, Series “L”, provided that if no such Series “L” shares are issued on March 1, 2024 pursuant to the Conversion Right, no such dividend shall be payable;$0.24 45625 per share on the First Preference Shares, Series "M"; and,$0.59 per share on the Common Shares.
The Corporation has designated the common share dividend and preference share dividends as eligible dividends for federal and provincial dividend tax credit purposes. All amounts are given in Canadian dollars unless otherwise indicated.
About Fortis
Fortis is a well-diversified leader in the North American regulated electric and gas utility industry with 2022 revenue of
Fortis shares are listed on the TSX and NYSE and trade under the symbol FTS. Additional information can be accessed at www.fortisinc.com, www.sedarplus.ca, or www.sec.gov.
For more information, please contact:
| Investor Enquiries Ms. Stephanie Amaimo Vice President, Investor Relations Fortis Inc. 248.946.3572 investorrelations@fortisinc.com | Media Enquiries Ms. Karen McCarthy Vice President, Communications & Government Relations Fortis Inc. 709.737.5323 media@fortisinc.com |
A .pdf version of this press release is available at: http://ml.globenewswire.com/Resource/Download/202754e4-8ecb-46a9-917c-6a4a7a76e192
FAQ
When are the dividends payable for Fortis Inc.?
What is the dividend per share for the First Preference Shares, Series 'F'?
What is the dividend per share for the Common Shares?
Are the common share dividend and preference share dividends designated as eligible dividends for tax credit purposes?
