Dividend-paying stocks can help you earn a regular passive income. However, not all dividend-paying stocks are worth investing in, and only a few have the potential to increase their future dividends and boost shareholders’ returns consistently. So, if you are eyeing a growing passive income stream, consider adding these Canadian Dividend Aristocrats to your portfolio.
TC Energy
With its high-quality asset base, TC Energy (TSX: TRP)(NYSE: TRP) is among the top income stocks listed on the TSX. Notably, the company has generated an average annual total shareholder return of 12% since 2000, reflecting its regulated and contracted assets that remain immune to the economic cycles. Thanks to its low-risk and high-quality asset base, TC Energy has increased its dividends at a compound annual growth rate (CAGR) of 7% since 2000 and is currently yielding over 5.8%.
The company expects its future dividends to increase by 5-7% annually, reflecting the continued momentum in its base business. Meanwhile, its $20 billion secured capital program, robust development portfolio, and in-corridor expansion are likely to drive its net income and cash flows, in turn, its future dividend payments. TC Energy’s diversified and high-quality assets, growing dividends, solid financial position make it a top stock to own at the current price levels.
Enbridge
Enbridge (TSX: ENB)(NYSE: ENB) is a must-have stock in any income portfolio. The company’s long dividend payment history, sustainable payouts, and high yield make it a top investment for investors looking for solid passive income. To be precise, Enbridge has uninterruptedly paid dividends for over 66 years. Further, it increased dividends by a CAGR of 10% since 1995, which is the highest among the peers.
I remain upbeat on Enbridge and expect the company to continue to enhance its shareholders’ returns through increased dividend payments. Enbridge’s diverse cash flow streams, $16 billion secured capital program, strength in its core business, and assets across conventional and renewable energy sources suggest that the company could continue to hike its future dividends at a decent pace.
Meanwhile, the recovery in its mainline volumes and favourable long-term global energy demand provide a strong underpinning for growth. Enbridge stock has recovered some of its losses on increased economic activities and offers a stellar yield of 7.2%.
Fortis
Like Enbridge, Fortis (TSX: FTS)(NYSE: FTS) is another must-have income stock for your passive income portfolio. The company operates a low-risk utility business that generates predictable cash flows and supports higher dividend payments. Notably, Fortis generates 99% of its earnings from the regulated utility business and has increased its dividends for 47 years in a row. Currently, it is offering a decent yield of 3.6%.
I believe Fortis’s growing rate base could continue to support its earnings and cash flows and drive future dividends. Fortis expects its rate base to increase to $40.3 billion in the next five years. Meanwhile, its dividends are projected to increase by 6% annually during the same period.
With its high-quality and diversified portfolio of regulated utility assets, opportunistic acquisitions, and continued investments in infrastructure and renewable energy, Fortis remains well-positioned to hike its annual dividends consistently.
