2 of the Best Canadian Dividend Aristocrats to Buy and Hold Forever

Fortis and Canadian Utilities are two of the best stock picks for income investors seeking long-term buy-and-hold assets for their portfolios.

Canadian Dividend Aristocrats are among the most reliable investments to consider adding to your portfolio if you’re seeking long-term and growing wealth generation. The TSX boasts some of the highest-quality stocks with stellar records of providing investors with consistently growing dividend payouts each year.

Companies with lengthy dividend growth streaks can generate cash flows in challenging economic conditions and possess solid fundamentals that allow them to finance growing shareholder dividends comfortably.

Investors with a long-term horizon and the discipline to buy and hold stock without giving in to temptations can become much wealthier in the long run, provided they find the right income-generating assets. Today I will discuss two of the best Canadian Dividend Aristocrats that you can consider for this purpose.

Fortis

Fortis (TSX: FTS)(NYSE: FTS) boasts a dividend growth streak that spans almost half a century, making it one of the best income-generated assets that Canadian investors can consider adding to their portfolios. The utility sector company is trading for $55.23 per share at writing and boasts a 3.66% dividend yield. The company’s management plans to increase its dividend payouts to shareholders by an average annual growth of 6% by 2026.

The utility holdings company generates almost all of its cash flows through highly regulated utility assets, which means Fortis earns predictable cash flows that it can use to fund its infrastructure and growing dividends comfortably. The company’s management expects to increase its rate base by a compound annual growth rate (CAGR) of 6% in the next five years. The company can therefore continue generating substantial revenues and growing dividends for several years.

Canadian Utilities

Canadian Utilities (TSX: CU) has a slightly longer dividend-growth streak than Fortis, boasting a solid 49-year streak of increasing dividend payouts. The stock is another utility sector giant and is the closest stock to becoming a Canadian Dividend Aristocrat with a 50-year streak.

Much like Fortis, Canadian Utilities generates predictable cash flows through its highly contracted and regulated assets. The company has been using its income to fund growing dividend payouts since 1972 without worrying about sustainability. The company’s management plans to continue increasing its dividend payouts at sustainable rates in the coming years.

Its consistent investments in long-term and regulated contracted assets can allow the utility sector giant to continue raising payouts to its shareholders. Trading at $35.17 per share at writing, Canadian Utilities boasts a juicy 5.00% dividend yield.

Foolish takeaway

If you are an income-seeking investor looking to invest in income-generating assets, Fortis and Canadian Utilities are two stock picks that could be stellar additions to your dividend income portfolio. Both companies offer growing dividend payouts to shareholders that can keep increasing each year.

Canadian Dividend Aristocrats are gifts that keep on giving. The longer you hold them, the more they will pay you. Fortis and Canadian Utilities are excellent stocks to consider for this purpose.

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends FORTIS INC.

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