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Canadian utility stocks have long been known to be boring but reliable investments to make in the stock market. Due to the defensive nature of the industry they operate in, the top Canadian utility stocks tend to negate the broader market movement, whether in bull or bear market conditions.
Typically remaining relatively stable against the broader market movement, utility stocks struggled in 2023 and continued to do so in early 2024.
Central banks in the U.S. and Canada have aggressively hiked key interest rates to cool the red-hot inflation for over a year and a half. While the interest rate hikes have stopped, the impact of higher interest rates has permeated into the utilities sector as well. When borrowing costs are higher, utility companies tend to see increasing interest expenses to contend with.
While stable, these businesses require heavy debt loads to fund capital projects. With loan repayment…
