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3 of the Top Dividend Aristocrats to Buy and Hold Forever

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Relatively few companies have a strong position in their respective industries, strong enough financials, and a predictably secure future outlook to be considered as stocks that you can virtually hold forever. The list gets even shorter if you want to buy dividend stocks that can be held for decades.

You need blue-chip companies that have already proven their mettle time and time again and have sustained and even grown their dividends through tough market conditions. There is a small and diverse collection of TSX stocks that fit the bill for “forever” dividend stocks, and here are three that should be on your radar.

A banking giant

As the largest bank in the country and the second-largest security currently trading on the TSX, the Royal Bank of Canada (TSX:RY)(NYSE:RY) is as secure and stable as a stock can get. The banking sector in Canada is rock-solid and has proven its strength on several occasions, most recently, in the 2020 crash. Despite falling considerably, the bank reached its pre-pandemic valuation in about a year.

RY is more than just a secure dividend stock, it’s also one of the more “active” growth stocks in the banking sector. Its 10-year compound annual growth rate (CAGR) is 13.7% right now, though it might be inflated thanks to the bank’s current, recovery-fuelled growth phase.

The bank has a stellar dividend history and has been growing its payouts for a decade. The current 3.4% yield, while not overly generous, can be pretty potent over the years, especially since the payouts will continually be increasing.

A telecom giant

The telecom industry in Canada is quite similar to the banking industry in one way, that is, most of the business is consolidated by a few key players, three in the case of telecom. And out of the three giants that control about one-third of the industry, BCE (TSX:BCE)(NYSE:BCE) is the most sizeable player by market capitalization.

It has three major business segments, wireless, wireline, and media, but wireless is responsible for most of the revenues the company generates. And with 5G on the rise, this is also the business segment expected to experience the most growth. The company has made strides in this arena and is currently considered the fastest 5G provider in Canada.

The company doesn’t offer a lot of capital appreciation potential. But its generous yield (5.6%) is enough of a reason to buy and hold this dividend stock in your RRSP, potentially forever.

An energy giant

The energy sector is going through an extended recovery phase. Many stocks, including the largest company in the sector, such as Enbridge (TSX:ENB)(NYSE:ENB), are currently trading almost at their pre-pandemic peak. Even though it’s a slow grower, the stock has been moving up quite consistently since the beginning of the year and has grown about 23% during this period.

The most significant energy player in the country and one of the largest energy transportation pipeline giants in North America hasn’t been a reliable “growth” stock since 2015. But it’s still a beloved dividend stock, thanks to its stellar history and potent yield. The company has been growing its payouts for 25 consecutive years and is currently offering a mouthwatering yield of 6.7%.

Foolish takeaway

All three companies are leaders in their respective industries and have sustained their payouts through two market crashes. Unless the sectors see a massive downgrading in the coming years (which might be the case for energy unless Enbridge refocuses extensively on natural gas), the three companies are expected to stay rewarding holdings for Canadian investors for decades to come.

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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Enbridge.

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