Investing in top-quality dividend stocks can help you generate a regular passive income over time. Moreover, you don’t have to pool tons of money to start investing in top dividend-paying stocks. Even a small but regular investment in some of the best Canadian dividend stocks could help you create a lot of wealth in the long run and could continue to generate steady income for a lifetime.
I have shortlisted the three best Canadian stocks that have consistently paid higher dividends. Moreover, these companies have resilient cash flows, indicating they could continue to enhance shareholders’ returns through higher dividends over the next decade. Also, you can buy these three stocks for less than $100.
Algonquin Power & Utilities
Investors could consider buying the shares of Algonquin Power & Utilities (TSX:AQN)(NYSE:AQN) for a growing passive-income stream. The Canadian utility company has rewarded its shareholders with consistent and higher dividends for more than a decade. Notably, it has increased its dividends at a CAGR (compound annual growth rate) of 10% in the past 11 years and offers a decent yield of 4.4%.
Algonquin Power & Utilities has a low-risk business and high-quality regulated assets backed by long-term power-purchase agreements. I believe the contractual framework, growing rate base, and resilient cash flow indicate that it could continue to deliver stellar total shareholder return. Further, it projects double-digit growth in its rate base and adjusted EBITDA over the next five years, which could drive its earnings and future dividends and push its stock higher.
Enbridge (TSX:ENB)(NYSE:ENB) is a must-have stock in your passive-income portfolio. Despite significant challenges from the pandemic, the energy giant uninterruptedly returned higher value to its shareholders through regular dividend payments. Barring 2021, Enbridge has delivered annual total shareholder returns of 15% in the past 25 years. Moreover, it expects to deliver an average annual total shareholder return of 13% in the coming years, reflecting its resilient business model and predictable cash flows.
Notably, Enbridge’s over 40 diverse cash flows streams, long-term contractual arrangements, and a $16 billion secured capital growth program could continue to drive its distributable cash flows and its dividends. Besides, the recovery in mainline volumes, improvement in energy outlook, momentum in gas distribution and storage business, cost-reduction measures, and opportunities in the renewable business further strengthen my bullish view on Enbridge stock. Furthermore, the stock offers a high yield of over 6.7%, which is very safe.
AltaGas (TSX:ALA) is another top Canadian stock for growth and regular dividend income. With its balanced portfolio of low-risk regulated utility assets and high-growth midstream operations, the company generates higher earnings and robust cash flows that drive its dividend payouts.
Notably, its midstream operations are supported by fee-for-service or take-or-pay contracts, which lowers risk. Moreover, I believe AltaGas could continue to benefit from rate base growth, higher export volumes in the midstream business, and the addition and retention of customers. AltaGas expects its earnings to increase at a decent pace, which is encouraging. Meanwhile, its diversified operations and cost-reduction initiatives are likely to support overall margins. Currently, AltaGas offers a healthy yield of 3.8%.