Many TSX-listed stocks pay dividends. However, only a select few have been able to maintain and even increase their benefits for years, regardless of the economic downturn and market volatility. These are primarily large-cap companies with a resilient business model and steady earnings growth supporting their payouts. Given their sustainable payouts and ability to grow dividends year after year, these Canadian stocks belong in the portfolio of anyone looking for hassle-free passive income.
Against this backdrop, here are the five best Canadian dividend stocks to buy right now.
Fortis shares
Fortis (TSX:FTS) is a rock-solid Canadian dividend stock for stress-free passive income. This utility operates a defensive business model built around rate-regulated cash flows. This means that profits are stable and predictable, even when markets become volatile. Thanks to steady cash flow growth, Fortis has increased its dividend for 51 years in a row.
Fortis focuses primarily on the transport and distribution of electricity and natural gas. These segments are relatively stable and provide a steady revenue stream regardless of fluctuations in energy prices. This insulation from market volatility ensures that shareholders continue to receive reliable, growing dividends.
Fortis’ multibillion-dollar capital program is expected to expand the interest base by approximately 6.5% annually through 2029. As the interest base grows, profits will increase, paving the way for further dividend increases. Management expects annual dividend growth of 4% to 6% per year through 2029.
Furthermore, rising demand for electricity, driven by manufacturing and data centers, provides a solid foundation for future growth, supporting its payouts.
Enbridge shares
Enbridge (TSX:ENB) is one of Canada’s most reliable dividend stocks. Its diversified businesses, including oil and gas pipelines, natural gas utilities and renewable energy projects, position the company well to generate strong earnings and distributable cash flow (DCF) in all market conditions. Revenues are mainly supported by regulated or long-term contracts and low-risk commercial arrangements, ensuring steady growth even during market turbulence.
The company has been paying dividends for over seventy years and has increased them annually for thirty consecutive years. The energy infrastructure company’s dividend has grown at a compound annual growth rate (CAGR) of 9%. Enbridge maintains a sustainable payout ratio of 60-70% of DCF and offers a high and reliable return of 5.7%.
Enbridge is likely to benefit from its extensive pipeline network, high asset utilization and long-term take-or-pay contracts. Furthermore, rising energy demands from data centers and the growing portfolio of renewable energy sources bode well for future growth.
Canadian natural resources stock
Canadian natural resources (TSX:CNQ) is a high-quality dividend stock for your portfolio. This oil and gas producer has a history of growing its dividend at a solid pace. Moreover, it is well positioned to pay and increase its dividends in the coming years.
The energy producer has continuously increased its dividend for 25 years in a row. Furthermore, CNQ’s dividend has grown at a CAGR of 21% over that period.
Canadian Natural’s production is diversified across multiple grades of crude oil, natural gas and natural gas liquids (NGLs), allowing management to efficiently allocate capital depending on market conditions. Although much of its production takes place in Canada, it also benefits from international exposure through operations in the UK North Sea and offshore Africa.
This combination of geographic diversification and product diversification gives Canadian Natural the flexibility to concentrate investments where returns are strongest. As a result, the company is well positioned to maintain its payouts.
The final two dividend stocks to add to your portfolio
In addition to Fortis, Enbridge and Canadian Natural Resources, TC Energy (TSX:TRP) and Telus (TSX:T) stand out as the best Canadian dividend stocks. TC Energy has increased its dividend for 25 years in a row, backed by stable, regulated assets and long-term contracts that support steady cash flow. The company targets annual dividend growth of 3 to 5% over time.
Telus, meanwhile, continues to impress with 27 dividend increases since 2011. With a plan to increase payouts by 3-8% annually through 2028, the telecom leader offers reliable income potential for investors looking for stability and consistent returns in their portfolios.
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