The top 3 Canadian dividend stocks that I think belong in everyone’s portfolio

Dividend-paying companies can be an investor’s best ally, especially for companies looking for both income and long-term growth. In addition to the regular cash flow they provide, reinvesting these dividends allows you to gradually accumulate more shares, an effect that only amplifies over time and significantly increases overall returns. Add to that the natural price appreciation that strong companies tend to generate, and the overall return potential becomes even more attractive.

Fortunately, many stocks on the TSX offer reliable dividends. These companies are backed by solid fundamentals, sustainable business models and a strong earnings base, allowing them to maintain and potentially increase their payouts year after year. Their stability, combined with the potential for steady capital growth, makes them well suited for investors looking to build wealth with lower volatility.

With this background, here are three dividend stocks that I think belong in everyone’s portfolio.

Canadian Dividend Stock #1

Fortis (TSX:FTS) is an attractive dividend stock that should be in any portfolio for stable income and growth. This utility focuses on energy transmission and distribution, reducing exposure to risks associated with energy generation and commodity price fluctuations. In addition, its rate-regulated operations enable the company to generate predictable and growing cash flows, which are the driving force behind 52 consecutive years of dividend increases.

The company’s defensive business model and strong balance sheet position it well for continued dividend growth. A $28.8 billion capital plan will expand the regulated asset base, strengthen the low-risk earnings profile while supporting future cash flow growth. Rising demand for electricity from data centers, mining operations and manufacturing is also providing a meaningful tailwind for both earnings and the share price.

Management expects the interest base to grow 7% annually through 2030, which is expected to support an annual dividend increase of 4% to 6%. Overall, Fortis is well positioned to deliver stable profits and growth over the long term.

Canadian dividend stock #2

TC Energy (TSX:TRP) is an attractive Canadian dividend stock that offers stable income with long-term growth potential. Because 98% of its earnings before interest, taxes, depreciation and amortization (EBITDA) are supported by rate-regulated or take-or-pay contracts, the company is largely insulated from commodity price fluctuations. This structure allows TRP to generate stable and predictable revenues. That stability has supported 25 consecutive years of dividend increases. Moreover, the country is likely to benefit from higher energy demand due to the expansion of data centers.

The extensive North American pipeline has high utilization rates, driving financial results and payouts. TC Energy has also extended its annual EBITDA growth outlook of 5 to 7% through 2028 and approved over $5 billion in new projects backed by long-term, low-risk agreements.

As demand for natural gas and cleaner energy infrastructure continues to rise, TC Energy appears well positioned to maintain annual dividend growth of 3 to 5%. For investors looking for reliable passive income alongside modest capital growth, TRP remains an attractive choice.

Canadian dividend stock #3

Telus (TSX:T) is another top TSX stock to add to your portfolio. Since 2004, the telecom company has returned more than $24 billion to its shareholders. In addition, the dividend has risen steadily thanks to a multi-year growth program launched in 2011. Today, the stock offers a high yield of more than 8%.

The ability to consistently generate profitable growth gives Telus the financial power to pay and increase its dividend. The company targets a payout ratio of 60-75% of free cash flow, a range that supports both income distributions and reinvestments in its network and services. Looking ahead, Telus expects dividend growth of 3 to 8% per year until 2028.

Telus’ network expansion and a diversified business model will drive payouts. Telus’ advanced wireless network, the expansion of the TELUS PureFibre broadband system and attractive bundled offerings strengthen Telus’ competitive position, helping to attract new subscribers while reducing customer churn. Meanwhile, the company’s push to acquire margin-boosting customers and streamline costs provides additional support for profit growth. These factors, along with a moderation in capital expenditures, will determine payouts and the share price in the coming years.