With this background, here are three Canadian stocks that can maintain their current payouts and increase their dividends even in a market downturn. So investors can count on these dividend stocks for years of passive income.
Top Dividend Stocks #1: Canadian Utilities
Utilities are known for their defensive and regulated operations and predictable cash flows. This allows them to pay dividends consistently under all market conditions. So a number of top utility stocks are a must-have in a portfolio to generate stable dividend income.
Within the utilities sector, investors could consider adding to this Canadian utilities (TSX:CU). The company holds the record for the longest streak of annual dividend increases among publicly traded Canadian companies, with 53 consecutive years of dividend growth.
Canadian Utilities’ payouts are supported by its highly contracted and regulated revenue base. The company’s years of investments have helped grow its global interest base to nearly $15.9 billion, supporting earnings growth and the ability to continue increasing payouts.
Looking ahead, the company plans to invest $6.1 billion in regulated utilities between 2025 and 2027. This will expand the interest base and lead to higher revenues and cash flow in the coming years. At the same time, Canadian Utilities is pursuing capabilities beyond regulated utilities, including electricity generation, cleaner fuels and energy storage. These emerging segments offer the potential for stronger long-term growth and diversify the revenue base. Overall, Canadian Utilities is a top dividend stock to buy and hold for the long term.
Top Dividend Stocks No. 2: TC Energy
TC Energy (TSX:TRP) is a top dividend stock that you can count on for years to come. With roughly 97% of profits tied to regulated activities or long-term take-or-pay contracts, TC Energy maintains a stable cash flow profile that is largely protected from volatile commodity prices. This allows the energy infrastructure company to pay its dividend and increase it consistently.
Notably, TRP has increased its dividend for 25 years in a row, reflecting the resilience of its earnings and cash flow across market cycles.
The extensive pipeline network connects low-cost natural gas to key regions in North America, ensuring consistent demand for the infrastructure. In addition to pipelines, TC Energy also has interests in nuclear, natural gas, wind and solar projects, diversifying revenue streams and positioning the company to take advantage of energy transition opportunities.
TC Energy plans to invest between $6 billion and $7 billion in long-lived, low-risk projects through 2026. This strategy is expected to increase profits and support annual dividend growth of approximately 3% to 5%.
Its solid dividend payment history, highly regulated and contracted cash flow, and visibility into future payouts make it a reliable dividend stock.
Top Dividend Stocks #3: Accept
Accept (TSX:EMA) is another top dividend stock that you can hold for years. The company’s payouts are supported by regulated utilities, which provide reliable cash flow. Thanks to its regulated assets and predictable cash flow, Emera has increased its dividend for 19 years in a row.
Emera’s $20 billion capital program through 2030 will likely increase its interest base, boosting profits over time. Management expects the interest base to increase 7% to 8% over this period, which will support earnings growth of 5% to 7% per year. Thanks to its growing earnings base, Emera plans to increase its dividend by 1% to 2% in the coming years.
Emera is expanding its solar capacity and modernizing Tampa Electric’s electrical grid. Additionally, it boosts energy storage and transmission infrastructure in Nova Scotia. These initiatives are likely to boost profits and cash flow. Additionally, its strong presence in Florida, one of North America’s fastest-growing energy markets due to rising population and development, positions the country well to deliver solid long-term growth.
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