2 Dividend Stocks to Buy Today and Hold for 25 Years

Here’s why Canadian Natural Resources Ltd. (TSX:CNQ)(NYSE:CNQ) and another top dividend-growth pick deserve to be on your radar right now.

| More on:
edit Business accounting concept, Business man using calculator with computer laptop, budget and loan paper in office.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

Volatility is returning to the markets, and investors hoping to build a retirement fund are wondering which stocks might be reliable long-term picks right now.

Let’s take a look at two companies that deserve to be on your radar for a self-directed portfolio today.


Fortis (TSX:FTS)(NYSE:FTS) might not be the most exciting business in the TSX Index, but it is tough to beat the quality of the company’s dividend growth. When it comes to planning your retirement, reliability is much more important than entertainment.

Fortis owns natural gas distribution, power generation, and electric transmission assets in Canada, the United States, and the Caribbean. The majority of the revenue now comes from the American businesses in regulated sectors, providing steady and predictable cash flow. When the U.S. dollar rises against the loonie, the company’s profits get an additional boost.

Fortis grows by making acquisitions as well as investing in organic projects. The current $17.3 billion capital program is expected to boost the rate base significantly in the next four years, and Fortis anticipates cash flow will grow enough to support dividend increases of 6% per year.

The company has raised the payout for 45 straight years, so the guidance should be solid. Investors who buy the stock today can pick up a dividend yield of 3.5%.

Canadian Natural Resources

Canadian Natural Resources (TSX:CNQ)(NYSE:CNQ) just made another large acquisition in the Canadian energy sector. The company is paying $3.8 billion to buy the Canadian oil sands and conventional oil assets owned by Devon Energy. The deal makes strategic sense in that the assets are close to existing CNRL operations. The purchase also moves CNRL closer to becoming the top oil sands player.

CNRL has a strong balance sheet and its diverse resource base, which includes oil sands, conventional oil, natural gas, and gas liquids, as well as offshore production, is widely viewed as the best energy portfolio in the country. CNRL generates strong cash flow and pays investors well while reducing debt and buying back shares.

The company raised the dividend by 12.5% for 2019, and steady annual increases should continue. The stock has pulled back to the point where it appears oversold. At the time of writing, investors can pick up CNRL for $36 per share compared to $49 last summer, so there is some decent upside potential once oil prices rebound. The dividend provides a 4.2% yield.

The bottom line

Fortis is a conservative pick that tends to hold up well when the broader market hits a rough patch. CNRL is a contrarian play on a top-quality company that has a growing dividend and offers a shot at some serious upside in the coming years. If you only buy one, I would probably make CNRL the first choice today.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Andrew Walker has no position in any stock mentioned.

More on Dividend Stocks

Dividend Stocks

Passive Income: 3 Top Canadian Stocks to Buy for Monthly Dividends

Companies such as Pembina Pipeline and Killam Apartment REIT pay investors monthly dividends, making them top bets for income-seeking investors.

Read more »

Dots over the earth connecting the world
Dividend Stocks

3 of the Top-Growing Stocks on Earth

Market volatility remains high in Q3 2022, but it’s easy to identify the top-growing stocks on Earth.

Read more »

Profit dial turned up to maximum
Dividend Stocks

1 Undervalued Canadian Dividend Stock to Buy for TFSA Passive Income and Total Returns

This cheap Canadian energy stock provides an attractive dividend yield for TFSA passive income and a shot at some big…

Read more »

money cash dividends
Dividend Stocks

Want Passive Income? 1 TSX Stock for $8/Day in Dividends

If you need cash right away, then this TSX stock can make you passive income from a stable dividend that…

Read more »

edit Balloon shaped as a heart
Dividend Stocks

My 3 Favourite TSX Dividend Stocks Right Now

Canadian dividend stocks make for great long-term buy-and-hold investments.

Read more »

value for money
Dividend Stocks

3 Incredibly Cheap Dividend Stocks to Buy for Dependable Passive Income

Now is an excellent time to load up on Canadian dividend stocks. Here are top picks that are all trading…

Read more »

A close up image of Canadian $20 Dollar bills
Dividend Stocks

3 Simple TSX Stocks to Buy With $25 Right Now

Canadians with capital of as low as $25 can purchase three simple stocks right now and earn recurring passive income…

Read more »

edit Person using calculator next to charts and graphs
Dividend Stocks

2 No-Brainer U.S. Stocks for Investors in August

Here are two undervalued U.S. stocks to diversify your investment portfolio. They both pay safe and growing dividends!

Read more »