Against this backdrop, here are two top dividend stocks for long-term returns.
Top dividend share no. 1: Fortis
Fortis (TSX: FTS) is a top dividend stock for investors focused on long-term returns and income stability. The regulated electricity and gas company uses a defensive business model and generates profits with low risk. Its interest-regulated assets provide insight into earnings and cash flows, protecting Fortis against economic volatility.
The predictable and growing cash flow has translated into solid shareholder returns. Fortis has raised its dividend for 52 years in a row, making it one of Canada’s most reliable income-producing stocks.
Looking ahead, Fortis management plans to invest $28.8 billion to expand its regulated asset base, which is expected to grow at a compound annual rate of 7% through 2030. As the interest base expands, profits should follow, providing the basis for further dividend increases. Based on this outlook, Fortis aims for annual dividend growth of 4% to 6% until the end of the decade.
Structural demand developments further strengthen the company’s long-term prospects. Rising electricity consumption, driven by industrial expansion and the rapid growth of energy-intensive data centers, is creating continued demand for utility infrastructure. In addition, continued investments in US electricity transmission networks, needed to support higher loads and integrate new energy sources, will allow Fortis to benefit from grid expansion in key markets.
Overall, Fortis is well positioned to deliver reliable income and decent capital gains over time.
Top Dividend Stock No. 2: Enbridge
Enbridge (TSX:ENB) is another top dividend stock with solid long-term returns. The energy infrastructure operates an extensive pipeline network that connects important supply and demand markets. This stimulates system usage and supports cash flow.
Further, Enbridge’s cash flow is supported by a diversified revenue base and low-risk, long-term commercial agreements, many of which are regulated or structured as take-or-pay contracts. As a result, Enbridge has minimal exposure to commodity price fluctuations. Furthermore, most of the EBITDA benefits from built-in inflation protection.
This resilient business model has allowed Enbridge to increase its dividend for 31 years in a row. Additionally, it aims to pay out 60% to 70% of its distributable cash flow (DCF) as dividends, which is sustainable in the long term and helps the company retain sufficient capital to fund future growth.
Enbridge’s core pipeline business is expected to continue to achieve steady growth, driven in part by higher system utilization. Furthermore, the company is also positioning itself to capitalize on emerging opportunities related to AI-driven energy demand.
The renewable energy portfolio is particularly supported by attractive prices for power purchase agreements, declining supply costs and favorable tax incentives. Importantly, these sustainable projects are supported by long-term contracts with leading technology and data center operators. This provides stability and will boost future cash flows.
Overall, Enbridge’s resilient business model, strong cash flow generation and exposure to AI-driven tailwinds position the company well to support dividend growth and deliver solid long-term returns.
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