4 Top TSX Dividend Stocks to Buy in September

When it comes to dividend investing, investors should focus on the long-term stability of the company’s earnings and cash flows. A company that generates stable earnings and cash flows is likely to pay and increase its dividends consistently, boosting shareholders’ returns.

Let’s take a look at top four TSX dividend-paying stocks that could continue to boost shareholders’ returns in the long run.

TC Energy

TC Energy’s (TSX: TRP)(NYSE: TRP) resilient business and a long history of payouts place it among the top TSX dividend-paying stocks. TC Energy’s business generates predictable cash flows that help the company to pay and increase its dividends consistently. Meanwhile, it’s remained mostly unaffected by the COVID-19 pandemic, as reflected through the high utilization rate of its assets.

Investors should note that from 2000 to 2015, TC Energy’s dividends have grown at a compound annual growth rate of 7%. Meanwhile, its dividend-growth rate has accelerated in the recent past and has increased at a CAGR of 8-10%.

TC Energy generates nearly 95% of its adjusted EBITDA from regulated assets or businesses with long-term contracts, implying that its payouts are very safe. Also, the company is advancing with the $37 billion of secured growth project, which indicates that its earnings and cash flows could continue to grow at a healthy pace and cover its payouts.

TC Energy projects its dividends to increase by 8-10% for fiscal 2021. Moreover, it expects the dividend to increase by 5-7% beyond 2021. Currently, TC Energy offers a high dividend yield of 5.4%.

Fortis

Fortis (TSX: FTS)(NYSE: FTS) should be on your radar if you are planning to invest in a dividend-paying stock. The company has raised its dividends uninterrupted for 46 years. Moreover, its low-risk business and predictable cash flows indicate that Fortis could continue to boost its shareholders’ returns in the coming years through higher dividends.

It generates almost all of its earnings (about 99%) from the rate-regulated utility assets, which is very safe. Fortis projects its rate base to grow to $38.4 billion by 2024, which is encouraging. Moreover, it expects 6% annual growth in its dividends through 2024.

Income-seeking investors should lap up Fortis stock for its resilient business, rate base growth, and solid dividends. Fortis currently offers a decent dividend yield of 3.6%.

goeasy

The lender to the subprime borrowers, goeasy (TSX: GSY) is another top dividend-paying stock that income-seeking investors could consider buying. With a history of increasing its earnings at a stellar double-digit rate, goeasy remains well positioned to boost its shareholders’ returns through dividend hikes.

Investors should note that goeasy’s earnings have increased at a CAGR of about 30% from 2001 to 2019. Moreover, the company has reported positive net income for the past 76 consecutive quarters. It has paid dividends for 16 years and has increased them for the past six years in a row.

goeasy’s 2.8% dividend yield may not attract you, but its ability to grow earnings at breakneck pace suggests that its dividends could continue to increase in the coming years.

AltaGas

With a low-risk and high-growth business and a dividend yield of 5.8%, AltaGas (TSX: ALA) is another excellent investment option for income investors. AltaGas expects to generate about 60% its adjusted EBITDA from utility business that generate predictable cash flows. Further, the company expects its rate base to increase at a high-single-digit rate in the coming years, implying that its payouts are safe.

While its utility business makes it top under-$20 defensive bet, the company’s high-growth midstream operations are likely to accelerate its growth and drive its stock higher, even amid an economic slowdown.

AltaGas’s high dividend yield, ability to accelerate earnings growth, and stable utility business support my bullish outlook on its stock.