Dividend All-Stars: Canadian stocks that keep paying year after year

When it comes to long-term investing, few strategies are as reliable as investing in dividend growth. In Canada, a select group of companies have consistently stood out for their ability to grow their dividends year after year, making them favorites among income-seeking investors.

Known as Canadian Dividend All-Stars (CDAS), these companies have increased their dividends for at least five consecutive years – offering both stability and growth. Let’s take a look at three of the most reliable dividend all-stars on the market today.

Fortis: a legacy of stability

For more than 50 years Fortis (TSX:FTS) has proven itself as one of the most reliable dividend payers in Canada. The utilities sector is known for its stability, and Fortis, with its diversified activities in regulated utilities, is no exception. Its long streak of dividend increases makes it a favorite stock for conservative investors and retirees looking for stable, predictable income.

At the time of writing, Fortis is trading at $71.53 per share, with a dividend yield of around 3.6%. While the stock is generally considered fairly valued – meaning there is little upside potential in the short term – its strong dividend growth makes it particularly attractive. Management targets an annual dividend increase of 4-6% through 2030, making it a solid choice for long-term dividend growth.

However, the stock isn’t cheap as it typically trades at a premium valuation. For those looking for a better entry point, a pullback to the $64-69 range would provide a more favorable opportunity to accumulate shares.

Empire: A defensive game with growth potential

Empire (TSX:EMP.A), the parent company of well-known supermarket chains like Sobeys, is another solid name in Canada’s dividend growth sector. Empire operates in the defensive consumer staples sector, capitalizing on the basic need for food, providing a steady stream of income even during economic recessions.

Empire has been increasing its dividend for about thirty years, with an impressive ten-year dividend growth rate of 8.3%. Empire is currently priced at $45.27 per share and offers a modest dividend yield of 1.9%. While this may seem low compared to some other stocks, the key here is the growth potential, especially in the wake of the current pullback.

At a 14% discount to the consensus price target, Empire offers an attractive buy-the-dip opportunity for investors seeking long-term total returns. The solid track record, combined with an essential business model, positions the company well for future dividend increases.

CN Rail: a rail giant with a competitive advantage

Canadian National Railway (TSX:CNR) is a great example of a blue chip stock with both stability and growth potential. The company’s unparalleled rail network extends across Canada, connecting the Atlantic and Pacific coasts, as well as the Gulf of Mexico. This extensive and difficult-to-replicate infrastructure, combined with a focus on operational efficiency and technological innovation, gives CNR a strong competitive advantage in the marketplace.

CNR has consistently grown its dividend, with a ten-year dividend growth rate of 11%. However, recent dividend increases have been more modest, with a 5% increase in January 2025. At around $137 per share, CNR offers a dividend yield of 2.6%. Despite the recent slowdown in growth, the stock still represents a solid, income-generating investment – ​​especially for those looking to invest in a stable, high-quality company.

At a discount of around 12% based on analyst price targets, CNR is an attractive option for long-term investors looking to add a solid dividend to their portfolio.

Takeaway for Investors: Why Dividend All-Stars Are Worth the Investment

For Canadian investors looking for stable, growing income, dividend stars like Fortis, Empire and Canadian National Railway represent some of the most reliable choices on the market. These companies have proven track records of dividend growth, making them ideal for those looking for income in retirement or long-term wealth accumulation.

While there may be short-term price fluctuations, the core of these companies’ appeal lies in their ability to grow their dividends year after year – regardless of market conditions. By focusing on companies with a history of dividend increases, investors can build a portfolio that generates stable income, offers growth potential and helps weather market volatility.