3 All-Weather TSX Dividend Stocks

These TSX stocks are a reliable bet to generate consistent income.

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I have said before that investors should allocate a portion of their portfolio to high-quality dividend stocks. A top dividend stock could continue to offer solid income, even when the market is down, and add stability. Here are three such all-weather dividend stocks listed on the TSX worth buying and holding for the long term.

Fortis 

With 48 years of consecutive dividend increases, Fortis (TSX:FTS)(NYSE:FTS), without a doubt, is an all-weather dividend stock worth investing in. The continued strength in its low-risk utility business, regulatory framework, and geographic diversity drives Fortis’s profitability and cash flows and, in turn, its higher dividend payments. 

Fortis projects its rate base to increase at a CAGR of 6% and reach $41.6 billion by 2026. The company’s growing rate base will likely drive its EBITDA and earnings and, in turn, higher dividend payments. Fortis expects its dividends to increase by about 6% annually through 2025. Moreover, Fortis stock offers a reliable dividend yield of 3.8%. 

Overall, Fortis’s solid capital plan, diversified and regulated utility assets, growing renewable power capacity, strategic acquisitions, and cost savings augur well for future earnings growth and will drive its dividend payments. 

Algonquin Power & Utilities

The continued growth in its earnings and cash flows on the back of a growing rate base has led Algonquin Power & Utilities (TSX:AQN)(NYSE:AQN) to increase its dividend. Notably, Algonquin Power & Utilities’s dividends have grown at 10% annually in the last 11 years. Moreover, its low-risk business model and continued rate base growth indicate that its dividends will likely grow at a healthy pace.  

Algonquin Power & Utilities’s five-year capital plan will lead to strong rate base growth, which, in turn, will drive its earnings and dividend payments. Further, expansion of its renewable power capacity, customer growth, strategic acquisitions, and cost savings augur well for growth. 

It’s worth noting that Algonquin Power & Utilities stock has witnessed a sharp pullback, representing an excellent buying opportunity. Further, it is offering a stellar yield of 4.8%. 

Enbridge

This list will not be complete without Enbridge (TSX:ENB)(NYSE:ENB) stock. This energy infrastructure giant has been uninterruptedly paying dividends for more than 66 years. Meanwhile, it has consistently boosted investors’ returns through higher dividend payments (its dividends have grown at a CAGR of 10% since 1996). Enbridge offers a solid yield of 6.6%. Further, its payouts are sustainable in the long run. 

Enbridge’s 40 diverse cash flow streams, contractual framework, and ongoing strength in underlying business suggest that Enbridge could continue to grow its dividends at a healthy pace in the coming years. Notably, Enbridge’s distributable cash flows are projected to increase by 5-7% in the foreseeable future. Further, management expects to grow its dividends at a similar rate. 

Looking ahead, improving energy outlook, higher mainline volumes, revival in demand, and continued strength in its core business will likely drive Enbridge’s financials. Moreover, its multi-billion-dollar capital plan, strategic acquisition, and improved efficiency will likely drive its earnings and higher dividend payments. 

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 recommends Enbridge and FORTIS INC. Fool contributor Sneha Nahata has no position in any of the stocks mentioned.

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