If you are eying stocks that will fetch you regular money in the form of dividends for the long term, consider investing in Enbridge (TSX:ENB)(NYSE:ENB), Fortis (TSX:FTS)(NYSE:FTS), TC Energy (TSX:TRP)(NYSE:TRP), and Toronto-Dominion Bank (TSX:TD)(NYSE:TD).
The reason for choosing these stocks is simple. These Canadian companies have well-established businesses that generate robust cash flows to support future payouts. Meanwhile, these companies have been paying and increasing their dividends for a very long period and are offering higher yields. Let’s look at their dividend history and future prospects.
Enbridge is unquestionably one of the top stocks to generate a regular inflow of dividend income. It has been returning a significant amount of capital to its shareholders through dividends. For context, it has increased dividends at a CAGR of 10% in the last 27 years. Meanwhile, it projects a 5-7% increase in its distributable cash flows, implying that investors could expect it to grow dividends at a similar pace in the future.
Notably, its well-diversified cash flows, strong secured projects, higher asset utilization rate, acquisitions, and expansion of renewable capacity position it well to deliver robust earnings in the future that would drive its payouts. Meanwhile, revenue inflators and productivity enhancements augur well for earnings growth. Enbridge offers a quarterly payout and is yielding over 6.3%.
Like Enbridge, Fortis is another must-have stock to generate consistent money through investing. It operates 10 diversified utility businesses and generates 99% of its earnings from regulated assets, implying that Fortis’s payouts and yield are well protected.
It has raised dividends for 48 consecutive years and remains well positioned to increase it further for many more years. Looking ahead, Fortis projects its rate base to increase by $10.4 billion, which will drive its dividends. Thanks to the growing rate base, Fortis sees a 6% growth in its dividends per annum through 2025. While Fortis’s dividends are projected to increase, it offers a solid yield of 3.6%.
TC Energy has a solid track record of growing its dividends at a dividend pace. Further, the visibility over its future payouts supports my confidence. It’s worth noting that TC Energy’s regulated and contracted assets generate resilient cash flows that drive its earnings and, in turn, its dividends.
It has consecutively increased dividends at a CAGR of 7% over the past 21 years and forecasts a 3-5% increase in its future dividends. TC Energy’s solid asset base, high utilization rate, and strong secured capital projects indicate that it could continue to grow its earnings at a decent pace, which will fuel higher payouts. Furthermore, additional sanctioned projects, revenue enhancements, and cost savings will likely support its financials. It pays quarterly dividends and yields 5.3%.
Toronto-Dominion Bank has been returning cash to its shareholders for more than 164 years now and is among the most reliable bets to generate regular dividend income. While it has been paying dividends for long, it increased the same at an average annual rate of 11% since 1995, which is encouraging.
Overall, Toronto-Dominion Bank’s diversified revenue base, growth in loans and deposit volumes, expected rise in interest rate, strong credit performance, and efficiency improvements indicate that it could continue to enhance its shareholders’ returns through higher dividend payments. Toronto-Dominion Bank pays dividends quarterly and offers a yield of 3.3%.