2 TSX Stocks With 26 Years of Dividend Growth to Buy and Hold Forever

Both of these stocks have excellent fundamentals, wide moats, and ever-increasing yields.

| More on:
potted green plant grows up in arrow shape

Image source: Getty Images

Did you get burned by the market last month, when all those high-valuation growth stocks in your portfolio tanked? Runaway inflation, faltering earnings, and the threat of multiple interest rate hikes from central banks have curbed the tech bull market we saw in 2021.

Fortunately, there are still companies out there that do well in these times. These companies have wide economic moats, solid revenues and earnings, years of consistent dividend yield increases, and they occupy oligopolistic positions in their industries.

Buying and holding one of these large-cap, blue-chip stocks and reinvesting their dividends could be an excellent defensive value play in an uncertain market environment. Let’s take a look at my top two picks.


Enbridge (TSX:ENB)(NYSE:ENB) is Canada’s largest energy infrastructure company, operating through five segments: Liquids Pipelines, Gas Transmission and Midstream, Gas Distribution and Storage, Renewable Power Generation, and Energy Services throughout North America.

Enbridge is able to maintain an incredibly strong wide moat due to its ability to secure +20-year transportation contracts with clients. As a result, its earnings, balance sheet, and cash flow remain consistently healthy. Recently, the stock has been buoyed by rising commodity prices and a resurgent energy sector.

Enbridge pays out one of the highest dividends among the TSX stocks, with a current yield of 6.58%. The five-year dividend growth sits at 11.74%, which is all the more incredible when you consider than Enbridge has posted a consecutive 26 years of dividend increases.

Canadian National Railway

Canadian National Railway (TSX:CNR)(NYSE:CNI) operates one of Canada’s two main railroad networks. Its route spans 19,500 miles of track across Canada and the United States. The company also provides vessels and docks, transloading and distribution, automotive logistics, and freight forwarding and transportation management services.

Canadian National Railway has some of the best operating ratios and assets among the TSX stocks. It also operates in a duopoly, with a very strong economic moat that is virtually impossible to penetrate. The company is consistently able to improve its cash flows, margins, and earnings due to this advantage.

Canadian National Railway doesn’t pay too high of a dividend, with the current yield sitting at 1.59%. However, this is affected by their higher share price, which is nearly three times that of Enbridge. More importantly, the company has a five-year dividend growth of 12.97%, which has also occurred for a consecutive 26 years.

The Foolish takeaway

Canadian dividend stocks like Enbridge and Canadian National Railway are looking more and more attractive to value-conscious investors concerned about the runaway tech and growth valuations seen in 2021.

Many Canadian investors are also worried about inflation. The good news is that the Canadian market has some of the most inflation-resistant stocks in the world, as seen with the energy and transportation sectors here.

While both stocks have respectable dividend yields, investors should focus more on their history of consecutive dividend increases. From a dividend-growth perspective, this is what really drives portfolio returns.

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 Tony Dong has no position in any of the stocks mentioned. The Motley Fool recommends Canadian National Railway and Enbridge.

More on Dividend Stocks

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Dividend Stocks

3 Canadian Dividend Stocks to Buy Hand Over Fist

These three Canadian dividend stocks each offer a unique opportunity, making them some of the best investments to buy at…

Read more »

A person builds a rock tower on a beach.
Dividend Stocks

Retirement Wealth: 2 Oversold Canadian Stocks to Buy Now and Own for Decades

These industry-leading dividend stocks look cheap right now and have increased their distributions annually for decades.

Read more »

Tired or stressed businessman sitting on the walkway in panic digital stock market financial background
Dividend Stocks

2 of the Safest TSX Stocks Right Now

The stock market is heading towards a crash. Investors are seeking the safety of dividends, and these two stocks provide…

Read more »

Payday ringed on a calendar
Dividend Stocks

Want Monthly Passive Income? Try These TSX Dividend Payers

In need of extra cash? These dividend stocks offer passive income each month, and you can pick them up cheap…

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

Want Safe Passive Income? Here Are 2 TSX Dividend Aristocrats for New Investors

Need some safe passive income? TSX Dividend Aristocrats like Fortis (TSX:FTS) are ideal stocks for new investors to hold in…

Read more »

grow dividends
Dividend Stocks

2 Cheap TSX Dividend Stocks to Buy Now

These top TSX dividend stocks now offer 6% yields.

Read more »

Piggy bank next to a financial report
Bank Stocks

Got $500? Create Passive Income of $500 in Just 33 Years

Only have a bit of cash to invest? By investing in the right stock, you could make $500 in annual…

Read more »

calculate and analyze stock
Dividend Stocks

2 Top TSX Dividend Stocks to Buy Now for a Self-Directed TFSA or RRSP

Top TSX dividend stocks are now trading at attractive prices for TFSA and RRSP investors.

Read more »