The 5 Best Canadian Dividend Stocks to Buy Right Now

If you prefer stable income flow from equities, consider buying these top five dividend stocks.

| More on:
stock data

Image source: Getty Images

If you prefer stable income flow from equities, consider buying dividend stocks. I have taken out a list of the top five Canadian dividend stocks that have been paying dividends for a very long period and have increased them in the last 10 years. Furthermore, these companies produce resilient cash flows, indicating they could continue to raise their dividends over the next decade. 

Here are the top five dividend stocks you could consider buying right now.

Toronto-Dominion Bank

Leading Canadian lender Toronto-Dominion Bank (TSX:TD)(NYSE:TD) has paid dividends for 164 straight years. Moreover, the bank raised its annual dividends at an average annual rate of 11% since 1995, which is higher than its peers.

The bank’s diversified portfolio, ability to drive loans and deposits, and operating efficiency support its earnings and, in turn, its dividends. With the expected improvement in the economy, Toronto-Dominion Bank’s top and bottom line could show growth in 2021. The bank pays an annual dividend of $3.16 a share, reflecting a yield of 4.2%. 

Canadian Utilities   

Canadian Utilities (TSX:CU) has raised its dividends for 48 years in a row. The company’s robust dividend payments are backed by its high-quality earnings base. Canadian Utilities derives its earnings from the regulated utility assets that generate predictable and growing cash flows and support its payouts. 

Canadian Utilities’s continued investments in regulated and long-term contracted assets suggest that it could continue to deliver healthy earnings and cash flows in the coming years, which is likely to support its higher dividend payments. The utility company pays an annual dividend of $1.74 a share, reflecting a yield of 5.6%.

Fortis

Utility giant Fortis (TSX:FTS)(NYSE:FTS) has raised its dividends for 47 consecutive years and remains well-positioned to increase it further. Like Canadian Utilities, Fortis also derives its earnings from regulated assets that generate resilient cash flows and support its payouts. 

Fortis’s focus on increasing its rate base growth and opportunistic acquisitions is likely to drive its dividends in the coming years. The company projects its dividends to grow at an average annual rate of 6% over the next five years and yields over 3.9% at the current price levels. 

TC Energy 

TC Energy (TSX:TRP)(NYSE:TRP) has raised its annual dividends by a CAGR of 7% in the past 20 years. Meanwhile, it projects an 8-10% growth in its annual dividend in 2021 and 5-7% after that. Notably, TC Energy’s robust dividend payments reflect the strength of its base business. 

The company’s dividends are backed by high-quality earnings from its diversified assets that are either regulated or have long-term contractual arrangements. Meanwhile, its $37 billion capital growth program is likely to support its earnings growth and, in turn, its higher dividends in the coming years. TC Energy currently offers a high yield of 6%. 

Enbridge

Enbridge (TSX:ENB)(NYSE:ENB) has increased its dividends for 26 consecutive years. Meanwhile, it has paid dividends for 65 years. The company’s diversified cash flows, secure growth projects, and strength in its core business support its higher payouts. 

Currently, Enbridge pays an annual dividend of $3.34, reflecting a yield of 7.8%. Meanwhile, it projects its distributable cash flow per share to continue to increase at a decent pace, suggesting investors could expect higher dividend payments in the coming years. 

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 Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Enbridge. The Motley Fool recommends FORTIS INC.

More on Dividend Stocks

Female hand holding piggy bank. Save money and financial investment
Dividend Stocks

Passive Income: 3 Top TSX Stocks That Pay Dividends Monthly

Given their high yields, attractive valuations, and stable cash flows, these three TSX stocks are excellent buys for income-seeking investors.

Read more »

Man making notes on graphs and charts
Dividend Stocks

Put Your Cash to Work: 3 Cheap TSX Stocks (With Dividend Yields of +5%) to Buy Now

Make your money work for you. Earn over 5% dividend yields with these under-$20 stocks.

Read more »

edit Woman calculating figures next to a laptop
Dividend Stocks

2 Oversold TSX Stocks for TFSA and RRSP Investors to Buy Now

These top TSX dividend stocks look oversold.

Read more »

Pixelated acronym REIT made from cubes, mosaic pattern
Dividend Stocks

2 Top High-Yielding REITs to Beat Inflation

Real estate investors can beat the 7% inflation by investing in these two high-yielding REITs.

Read more »

Increasing yield
Dividend Stocks

Passive-Income Alert: 2 Top TSX Stocks to Buy Now for 6% Yields

Top TSX dividend stocks now trade at discounted prices.

Read more »

Tired or stressed businessman sitting on the walkway in panic digital stock market financial background
Dividend Stocks

Which Canadian Stocks to Buy Ahead of a 2023 Recession?

Fortis stock may not be cheap, but it looks like a far better bet than bonds or GICs as rates…

Read more »

grow money, wealth build
Dividend Stocks

1 Top Discounted Growth Stock to Buy in This Market Environment

Consider investing in this Canadian growth stock to invest in a tech company that has remained resilient, despite the challenging…

Read more »

young woman celebrating a victory while working with mobile phone in the office
Dividend Stocks

TFSA Passive Income: 3 Incredible Stocks That Earn $365 Every Month

Are you looking to raise the passive income in your TFSA? Here are three oversold stocks that could easily earn…

Read more »