Top dividend-paying stocks are one of the best ways to generate a predictable passive income stream. Investors looking for a growing passive income stream could consider buying these five TSX stocks. These TSX stocks have paid and increased their dividends for a very long period. Further, their solid fundamentals and resilient cash flows suggest that these Canadian companies could continue to grow their dividends at a decent pace in the coming years.
Canadian Utilities (TSX:CU) has the longest track record of increasing its dividends. To be precise, it has raised it for 49 consecutive years and is likely to increase it further, thanks to its growing high-quality earnings base. Canadian Utilities earns all of its earnings from the regulated and contracted assets that generate predictable and resilient cash flows and support its dividend payouts.
It offers a solid yield of over 5% and continues to invest in the regulated and contracted assets, implying that investors could rely on its dividends. The companies growing high-quality earnings base and cost efficiencies are likely to drive its future earnings, in turn, its dividends.
Fortis (TSX:FTS)(NYSE:FTS) raised its dividends for 47 years in a row. Meanwhile, the utility giant predicts 6% annual growth in its dividends over the next five years. Its low-risk business, diversified assets, and growing dividends make it a must-have stock for a predictable passive income.
Fortis owns about 10 regulated utility assets that generate resilient earnings and cash flows. Meanwhile, it projects its rate base to increase by 6% annually through 2025 and reach $40 billion. Its growing rate base, conservative business mix, and growth opportunities in the renewable segment suggest that Fortis’ payouts are sustainable in the long run. Also, it will continue to boost its shareholders’ returns through increased dividends.
Enbridge (TSX:ENB)(NYSE:ENB) has been increasing its dividends by about 10% annually for the last 26 years in a row. Furthermore, it has been paying dividends for nearly 66 years. Its solid dividend payment history, highly diversified cash flow streams, sustainable payout ratio, and a high yield of over 7% make it a top income stock for long-term investors.
I believe the continued momentum in its core business, recovery in mainline volumes, and a $16 billion diversified secured capital program positions its well to deliver robust distributable cash flows in the coming years. Enbridge expects a 5-7% growth in its distributable cash flow per share in the future years, implying that its dividends could increase at almost the same rate.
TC Energy (TSX:TRP)(NYSE:TRP) increased its dividends by about 7% annually in the last 21 years and is offering a high yield of 5.9%. Its regulated and contracted have helped it to deliver strong cash flows and drove its dividends higher.
Thanks to its low-risk business and predictable cash flows, TC Energy projects 5-7% growth in its annual dividends in the coming years. Its multi-billion-dollars secured capital program, strong development portfolio, high-quality assets, and growing dividends make it a solid passive income stock.
Algonquin Power & Utilities
Algonquin Power & Utilities (TSX:AQN)(NYSE:AQN) has increased its dividends by 10% annually in the past decade. Further, it projects 10% growth in its dividends for 2021. Algonquin Power & Utilities’ sold dividend growth is backed by its high-quality assets, long-term contracts, and continued rate base.
It projects 11% annual growth in its rate over the next five years. Meanwhile, its adjusted EBITDA and earnings are likely to mark double-digit growth during the same period. I believe its low-risk and diversified business, growing regulated asset base, and solid earnings growth provide a strong base for future growth.