The 4 Best Dividend Stocks for Regular Income

Those looking for regular income through investing could consider buying high-quality dividend stocks. Here are a few reliable dividend-paying stocks that you can buy now and hold for the long term for an additional inflow of cash. 

Fortis

With its low-risk business and ability to generate steady cash flows, Fortis (TSX: FTS)(NYSE: FTS) is an obvious choice in an income portfolio. It owns 10 regulated utility businesses and generates almost all of its earnings from those assets. It means that Fortis’s payouts are well protected and are sustainable in the long term. 

Fortis’s dividend has been growing for the past 48 years. Meanwhile, it projects a 6% growth in annual dividends over the next four years. It’s worth noting that Fortis’s rate base will likely increase to $41.6 billion by 2026, which will expand its high-quality earnings base and drive its future payouts. Also, growing renewables capacity, cost-savings, and acquisitions bode well for growth. 

Fortis pays a quarterly dividend of $0.54 a share, reflecting a yield of 3.6%.

Canadian Utilities

When it comes to dividend income, utility stocks appear attractive due to their resilient cash flows, and thus my next stock is also from the utility sector. Besides Fortis, I am bullish on Canadian Utilities (TSX: CU) stock owing to its long track record of annual dividend increases. 

To be precise, Canadian Utilities’s dividend has grown in the past 49 years, and its low-risk business indicates that it could continue to increase its dividends further in the coming years. Its high-quality earnings base is driven by regulated and contracted assets. Additionally, its continued investments in regulated assets and cost savings will likely drive its earnings and, in turn, its dividend. 

Canadian Utilities pays a quarterly dividend of $0.44 a share, reflecting a yield of 4.9%. 

Enbridge

Next up is Enbridge (TSX: ENB)(NYSE: ENB). Its diversified income streams, resilient cash flows, consistent dividend growth (27 years in a row), and high yield of 6.4% make it a perfect stock for income investors. 

Looking ahead, the recovery in its mainline volumes, higher asset utilization rate, revenue escalators, and cost-saving measures will likely drive its distributable cash flows and, in turn, its dividend payments. Further, its solid secured projects, strategic acquisitions, growing renewable capacity, and contractual arrangements bode well for future dividend growth. 

Bank of Montreal

The last stock on this list is Bank of Montreal (TSX: BMO)(NYSE: BMO), and there are good reasons for that. It’s worth noting that Bank of Montreal has been paying regular dividends for the past 192 years. Further, its dividend has grown at a mid-single-digit rate over the past several years, which is encouraging. 

Overall, Bank of Montreal’s diversified revenue sources and operating leverage have driven its earnings higher and, in turn, supported increased dividend payments. 

Looking ahead, increased loan and deposit volumes, expected increase in interest rates, lower provisions, and efficiency savings would likely drive its profitability and payouts. Bank of Montreal pays $1.33 per share in quarterly dividend, reflecting a yield of 3.7%.

While Bank of Montreal offers a reliable dividend, its stock is trading cheaper than most of its peers on the valuation front and provides an opportunity to go long.