Caribbean Utilities' Unstoppable Dividend Growth

Caribbean Utilities (TSX: CUP.U) is a small-cap utility stock that offers an attractive passive income opportunity for Canadian investors. Despite its relatively low profile, this Caribbean-based company has achieved five consecutive years of dividend increases and boasts an uninterrupted dividend payout history since 2005.

The stock's market value is approximately $868 million CAD ($620 million USD), making it significantly smaller than the more well-known utility giant Fortis (TSX: FTS), which holds a controlling 59.5% stake in Caribbean Utilities. This unique setup means that investors who hold Fortis shares also indirectly own a portion of Caribbean Utilities.

Caribbean Utilities' dividend yield stands at 5.5%, the highest among its Canadian utility stock peers, with companies like Emera and Algonquin Power & Utilities offering significantly lower yields. The company's strong financial performance is reflected in its recent 20% surge in net earnings during the first half of 2026.

One significant advantage for investors is that Caribbean Utilities' operating currency, the Cayman Islands Dollar, is pegged to the US dollar, providing a stable and predictable revenue stream. Additionally, the company's dividend payout ratio remains under 70%, allowing it to reinvest in grid modernization while maintaining its growing quarterly payouts.