3 Top Canadian Dividend Stocks to Hold Forever

These TSX stocks have the potential to increase their future dividends and boost shareholders’ returns consistently.

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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. 

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.

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