4 Safe Dividend Stocks to Buy and Hold Forever

Given their strong track record, steady cash flows, and healthier yields, these four Canadian stocks are excellent additions to your portfolio.

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The Canadian equity markets have become volatile in the last few weeks. Investors are becoming increasingly worried about the impact of rising COVID-19 cases on the economic recovery. So, in this volatile environment, investors can strengthen their portfolios by investing in fundamentally strong dividend stocks. Meanwhile, here are four stocks that generate steady cash flows and pay dividends at healthier yields.


Amid the rising demand for faster and reliable internet services, the advent of 5G could be a significant growth driver for telecommunication companies, including BCE (TSX:BCE)(NYSE:BCE). Given its strong balance sheet and aggressive spending to expanding its fibre, wireless home internet, and 5G networks, the company is well equipped to benefit from the demand growth. The company’s management expects to cover 70% of the Canadian population with 5G service by the end of this year.

Along with these initiatives, the reopening of the economy and increased remote working and learning could boost the company’s financials in the coming quarters. So, I believe BCE’s dividends are safe. Meanwhile, BCE’s forward dividend yield currently stands at an attractive 5.68%.


Second on my list would be Fortis (TSX:FTS)(NYSE:FTS), which operates 10 regulated utility businesses serving around 3.4 million customers. With 93% of its assets involved in the low-risk transmission and distribution business, the company generates stable cash flows, allowing it to raise its dividends for 47 consecutive years. Currently, its forward dividend yield stands at 3.62%.

Meanwhile, Fortis’s management has planned to increase its rate base from $30.5 to $40.3 billion over the next five years at a CAGR of 6% and has prepared to invest $19.6 billion during this period. Along with these investments, the favourable rate revisions could drive its cash flows in the coming years. So, the management has planned to raise its dividends at a CAGR of 6% through 2025. Given its stable cash flows, solid growth prospects, and healthy dividend yield, I believe Fortis is an excellent bet for risk-averse investors.


Enbridge (TSX:ENB)(NYSE:ENB) operates 40 diverse revenue sources, with around 98% of its cash flow generated from regulated assets or long-term contracts, delivering stable cash flows. Supported by these solid cash flows, the company has paid a dividend uninterrupted since 1953 while raising it for the last 26 straight years at a CAGR of 10%. The company’s forward dividend currently stands at a juicy 6.89%.

Meanwhile, Enbridge looks to expand its midstream and renewable assets and has planned to invest $17 billion over the next three years. These investments could increase its adjusted EBITDA by $2 billion from 2023. So, given its impressive track record, healthy growth prospects, solid liquidity position, and high dividend yield, I believe Enbridge would be an excellent stock to have in your portfolio.

Algonquin Power & Utilities

Algonquin Power & Utilities (TSX:AQN)(NYSE:AQN) is involved in low-risk utility business while generating power from renewable assets. Meanwhile, its long-term agreements to sell power shield its financials from price and volume fluctuation, delivering stable cash flows. These stable cash flows have allowed the company to raise its dividends by over 10% every year for the last 11 years. Its forward dividend yield currently stands at a healthy 4.35%.

Meanwhile, the company raised around $1 billion last month through new equity offerings to expand its renewable assets. Further, the company’s long-term growth prospects also look healthy, with its plans to invest $9.4 billion over the next five years to expand its utility and renewable assets. So, these investments could boost its cash flows, allowing the company to continue with its dividend hikes.

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.

The Motley Fool owns shares of and recommends Enbridge. The Motley Fool recommends FORTIS INC. Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned.

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