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American and Israeli jets strike strategic Iranian targets. Another of that country’s leaders is reported to have died. Oil prices surge. Stock markets tumble. There are reports of back-door U.S.-Iran negotiations. Oil prices drop in anticipation of a ceasefire. Stocks rise. Iran denies any talks. More missiles are fired. Oil rises. Stocks drop. This is the pattern we’ve seen since the U.S. and Israel launched their attacks on Iran on Feb. 28.
The CBOE VIX volatility index jumped to 31.36 on March 27 from 19.86 at the close on Feb. 27, an advance of almost 58%. The S&P 500 dropped to 6,368.85 on March 27 from 6,878.88 on the day before the first attacks, a loss of 7.4%. Since the end of March, the S&P has rallied, reaching new all-time highs by the end of April.
What’s next? Who knows? Much depends on how which side of the bed Donald Trump gets up on in the morning.
What we can assume is that the longer this war goes on, the more anxious investors will become. That will put more downward pressure on share prices. Nasdaq and the Dow are already in correction territory. The S&P isn’t there yet, but it likely will be next week.
If you are nervous about the situation (and who isn’t?), you can reduce the risk in your portfolio by adding low-volatility stocks to your mix. Utilities are one of my go-to positions in times like this.
The S&P/TSX Capped Utilities Index is up 10.3% year-to-date to April. It’s a sea of tranquillity in a raging storm.
An easy way to invest in this sector is to buy units of the iShares S&P/TSX Capped Utilities Index ETF (TSX: XUT). The units are up about 11% so far this year, and the trailing distribution yield is 3.5%.
If you prefer an individual stock, check out this top performing Canadian utility, which I follow in my Internet Wealth Builder newsletter. It has outperformed the Utilities sub-index so far in 2026, with a gain of 13.1% and has an attractive yield.
Canadian Utilities Ltd. (TSX: CU), which is based in Calgary, is a subsidiary of ATCO Ltd. Its operations include electricity generation, transmission, and distribution and natural gas transmission, distribution, and infrastructure development. It also provides energy storage and industrial water solutions and has been heavily investing in green energy projects for over 20 years. Canadian Utilities and its subsidiary and affiliate companies have approximately 8,600 employees and assets of $25 billion.
The share price is up about 32% in the past 12 months, pulling out of a steep decline that was triggered by interest rate increases by the Bank of Canada that followed the pandemic. The year-to-date gain is about 13.1 %.
The company released fourth quarter and year end results for 2025, and they weren’t pretty. Fourth quarter adjusted earnings were $197 million ($0.72 per share), which was $6 million ($0.02 per share) lower compared with the fourth quarter of 2024. The company was impacted by $57 million by the temporary decrease in the regulated 2025 return on equity and other factors.
For the full year, earnings attributable to shareholders were $119 million ($0.15 per share). That was down from $480 million ($1.48 per share) in 2024. The company said earnings were negatively impacted by certain non-cash impairments and write-offs.
The company has embarked on a five-year capital expenditure plan for its regulated utilities. This will involve approximately $12 billion in capital spending which will support a consolidated mid-year rate base CAGR of 6.9% from 2026 to 2030 across the company’s regulated jurisdictions in Canada and Australia. This implies the consolidated mid-year rate base will grow from $16.6 billion in 2025 to $23.2 billion in 2030.
On Jan. 8, the company declared a first-quarter dividend of $0.4623 per share, or $1.85 on an annualized basis, continuing its 54-year track record of consecutive annual dividend increases. The yield at the current price is 3.8%.
Profit in 2025 was impacted by several non-recurring factors. However, the company should generate improved results in 2026 and beyond, implying a continuation of the more than half century of annual dividend increases.
Canadian Utilities would be of interest to more conservative, income-oriented portfolios in the current situation. But a warning: If the Iran war drags on and rising fuel prices feed inflation across the global economy, central banks may have no choice but to raise interest rates. As we saw in 2022, that would be bad news for all interest-sensitive stocks, including utilities. So, keep a close watch on developments and act accordingly.
Consult with your financial advisor before investing to ensure the stock aligns with your investment objectives and your tolerance for risk.
Gordon Pape is one of Canada’s best-known personal finance commentators and investment experts. He is the publisher of The Internet Wealth Builder and The Income Investor newsletters, which are available through the Building Wealth website.
Follow Gordon Pape on X at X.com/GPUpdates and on Facebook at www.facebook.com/GordonPapeMoney.
For more information and details on how to subscribe to Gordon’s newsletters, go to www.buildingwealth.ca/subscribe.
Notes and Disclaimer
Content © 2026 by Gordon Pape Enterprises. All rights reserved. Reprinted with permission. The foregoing is for general information purposes only and is the opinion of the writer. Securities mentioned carry risk of loss, and no guarantee of performance is made or implied. This information is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting, or tax advice. Always seek advice from your own financial advisor before making investment decisions.
Image: iStock.com/jitendrajadhav
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