4 Top Canadian Dividend Stocks to Buy and Hold Forever

How would you like dividend income that lasts forever? Well, here are four Canadian stocks that might just do the trick if you are patient.

| More on:
stock research, analyze data

Image source: Getty Images

Canadian investors love dividend stocks. Monthly or quarterly income distributed in a tax-efficient manner (at least better than interest), what’s there not to love? While dividend stocks are not always the most exciting businesses, they are often stable and highly cash generative.

The best Canadian dividend stocks also provide upside from capital returns and dividend growth. Given this, here are four dividend stocks I would be happy to buy and own for just about forever.

A Canadian infrastructure stock

Out of the pandemic, infrastructure spending will be a major factor in many nations’ economic recovery. Yet, many debt-heavy countries will now have to resort to private investments. This increasing trend should benefit Brookfield Infrastructure Partners (TSX:BIP.UN)(NYSE:BIP) for years ahead.

BIP has scale in a broad array of infrastructure assets including midstream and energy assets, railroads and ports, various utilities, and data/cellular infrastructure. This Canadian stock has a great track record of total returns.

Over the past 10 years, it has returned over 600%. This gets interesting when I tell you 277% of that return is actually from dividends. It is a great dividend compounder. It has grown its dividend by a compound annual growth rate (CAGR) of 10% since 2009. The company expects 5-9% annual dividend growth going forward. It pays a 3.7% dividend today.

A top telecom stock

Another Canadian stock focused on our cellular, data, and internet infrastructure and services is Telus (TSX:T)(NYSE:TU). Over the years, Telus has consistently impressed me. It has a unique and innovative culture that sets it above its telecom peers. Through the pandemic, it consistently garnered industry-leading customer additions. As a result, its earnings were much less volatile.

Similarly, rather than investing in costly media assets, Telus has built a moat in digital verticals instead. It just spun off its digital IT and customer experience business. Likewise, it has strong businesses in virtual healthcare, agri-technology, and security.

While Telus pays a 4.6% dividend today, it already raised its dividend by 8.6% this year. On average over the past five years, this Canadian stock has raised its dividend by 7% per annum.

A top Canadian real estate stock

As e-commerce continues to become more important in society, demand for logistics and warehousing real estate should continue to grow. One Canadian stock that I really like for this trend is Dream Industrial REIT (TSX:DIR.UN). It operates a portfolio of multi-tenanted warehousing, logistics, and industrial properties across Canada, America, and Europe.

Despite even the pandemic, this REIT has been enjoying very strong rental rate growth in almost all its core markets. Likewise, it just acquired a transformational portfolio of properties in Europe. This will provide a platform for aggressive growth in that region.

This Canadian stock has a low-levered balance sheet (around 30%), strong expected near-term growth, and a nice 4.6% dividend today.

A global renewable leader

Another long-term trend that won’t stop soon is the shift to renewable sources of power. As one of the largest pure-play, publicly-listed renewable power stocks, Brookfield Renewable Partners (TSX:BEP.UN)(NYSE:BEP) is very well-positioned. After a massive run-up in 2020, this Canadian stock has pulled back to more reasonable levels.

BEP operates 21,000 megawatts of hydro, wind, solar, storage, and distributed generation power capacity. It has been enjoying a very strong corporate demand to contract power from its assets. Consequently, it has more than 27,000 megawatts of capacity in its power development pipeline. That should fuel many years of cash flow growth.

The stock pays a 3.3% dividend, but it has been growing by a 6% CAGR since 2012. This is a great Canadian stock to earn some green in your pocket and make the world a greener place.

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 Robin Brown owns shares of Brookfield Infrastructure Partners, Brookfield Renewable Partners, DREAM INDUSTRIAL REIT, and TELUS CORPORATION. The Motley Fool recommends BROOKFIELD INFRA PARTNERS LP UNITS, Brookfield Infrastructure Partners, DREAM INDUSTRIAL REIT, and TELUS CORPORATION.

More on Dividend Stocks

Growth from coins
Dividend Stocks

3 Canadian Dividend Stocks That Are Dirt Cheap Right Now

These three Canadian dividend stocks look attractive with their above 6% yields and cheaper valuations.

Read more »

Money growing in soil , Business success concept.
Dividend Stocks

3 TSX Stocks That Could Make You a Millionaire

These three TSX stocks each have outstanding potential while trading undervalued today, creating significant opportunities for investors.

Read more »

Retirees sip their morning coffee outside.
Dividend Stocks

TFSA Investors: 3 Dividend Stocks You Haven’t Bought Yet, But Should

I get it, these dividend stocks aren't doing so hot these days. But investors should buy now and think long…

Read more »

telehealth stocks
Dividend Stocks

Retirees: 2 Dividend Stocks (With +6% Yields) for Worry-Free Passive Income

These TSX stocks offer attractive yields and have solid dividend payment histories, implying retirees can easily rely on them.

Read more »

Target. Stand out from the crowd
Dividend Stocks

2 Canadian Dividend Stocks to Buy Amid a Market Correction for Years of Passive Income

Here are two of the best Canadian dividend stocks long-term investors can buy right now to earn stable passive income…

Read more »

Caution, careful
Dividend Stocks

Top Investor-Favourite TSX Stocks to Avoid This Year

Here are two TSX stocks that could continue to underperform.

Read more »

Businessperson's Hand Putting Coin In Piggybank
Dividend Stocks

New Investors: How to Safely Make $150 in Monthly Passive Income

In this current market environment, we’re all craving safety and security. New investors looking for stable and growing passive income…

Read more »

A golden egg in a nest
Dividend Stocks

3 Stocks to Turn Five-Digit Savings Into a Six-Digit Nest Egg

If you have enough time, you can achieve decent growth goals with safe and modest growth stocks in your portfolio.

Read more »