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3 Top Dividend Stocks to Own Forever

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Canadian RRSP and TFSA investors are searching for top dividend stocks to build retirement and income portfolios.

Should Fortis be a top stock on your buy list?

Fortis (TSX:FTS)(NYSE:FTS) is one of those stocks dividend investors can simply buy and forget for decades. The company gets nearly all of its revenue from regulated businesses and grows through strategic acquisitions and development projects.

The board raised the dividend annually for the past 47 years. Fortis intends to increase the payout by 6% per year through 2025. The company expects the $19.6 billion capital program to boost the rate base from $30 billion in 2020 to $40 billion in 2025.

Utilities might not be the most exciting companies, but in the case of Fortis, the returns make it a rock star. A $10,000 investment in Fortis 25 years ago would be worth $200,000 today with the dividends reinvested.

The stock looks cheap right now near $51 compare to the 12-month high around $59 per share.

Why Enbridge is a top dividend stock to buy now

Enbridge stock provides a 7.4% dividend yield at the current price of $45 per share. Investors who bought at $36 in early November are already sitting on nice gains, but more upside should be on the way. Enbridge traded at $57 before the pandemic.

The board raised the dividend last year, and investors should see the payout increase by 5-7% annually in line with anticipated growth in distributable free cash flow. The challenging conditions facing the oil pipeline business hit revenue in that segment last year, but rising fuel demand through 2021 should improve the situation. In the meantime, Enbridge’s natural gas transmission, gas storage, and renewable energy assets continue to deliver solid results.

Enbridge still appears oversold, and investors who buy now get paid well to wait for the energy market to fully recover.

A $10,000 investment in Enbridge 25 years ago would be worth $286,000 today with the dividends reinvested.

Is Toronto-Dominion Bank stock still a good buy?

TD (TSX:TD)(NYSE:TD) recovered all of its 2020 market crash losses and now trades near a 12-month high. The stock isn’t as cheap as it was a few months ago, but TD deserves to be an anchor position in a portfolio focused on top dividend stocks.

The government will likely let TD and its peers raise dividends again in 2021. Share buybacks and acquisitions should also ramp up in the next couple of years. That’s good news for investors.

TD has one of the best dividend-growth rates in the TSX Index over the past two decades. That trend should continue. Interest rates will eventually increase, which tends to be good for bank profits. In addition, TD’s large American business gives investors exposure to the U.S. economic recovery through a top Canadian dividend stock.

A $10,000 investment in TD just 25 years ago would be worth $280,000 today with the dividends reinvested.

The bottom line

Fortis, Enbridge, and TD are leaders in their respective markets and pay attractive dividends that should continue to grow. If you are searching for top dividend stocks to put in your RRSP or TFSA portfolios, these companies deserve to be on your buy list.

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The Motley Fool owns shares of and recommends Enbridge. The Motley Fool recommends FORTIS INC. Fool contributor Andrew Walker owns shares of Enbridge, Fortis, and TD.

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