Amid uncertainty and a high level of volatility, it’s prudent to invest in the shares of the companies that offer steady dividends. While several Canadian companies pay dividends, we’ll focus on corporations that have well-established businesses, resilient cash flows, and clear visibility of future earnings. Further, these companies have consistently paid and raised dividends for at least 20 years.
TC Energy
For over two decades, TC Energy (TSX: TRP)(NYSE: TRP) has increased dividends at a CAGR of 7%, which makes it one of the most reliable income stocks. The company’s regulated and contracted assets account for about 95% of its earnings, indicating that its payouts are well protected. Further, the expansion of its high-quality earnings base provides clear visibility over its future payouts.
It’s worth noting that TC Energy offers a dividend yield of 5.2%, while it projects its dividends to increase by 3-5% per annum in the coming years.
Looking ahead, TC Energy’s strong secure capital program, additional sanctioned projects, higher asset utilization rate, and productivity savings will likely drive its cash flows and support increased dividend payments.
Enbridge
With an uninterrupted dividend increase history of 27 years, Enbridge (TSX: ENB)(NYSE: ENB) stock is another top bet for investors seeking stable income amid all market conditions. Its diversified asset base, contractual arrangements, and strength in core business augur well for future dividend payouts. Meanwhile, it projects 5-7% annual growth in its DCF (distributable cash flow) per share in the medium term, which is indicative of a future dividend-growth rate.
The company offers a high yield of 6.1%, which is well protected through its growing earnings base. Notably, Enbridge’s multi-billion-dollar secured growth projects, sustained momentum in its gas transmission, distribution and storage, and expansion of renewable power capacity provides a solid base for future earnings and will likely drive its dividend.
Fortis
Fortis (TSX: FTS)(NYSE: FTS), without a doubt, is a must-have stock in any income portfolio. The company owns 10 regulated businesses that account for 99% of its earnings, implying that its dividend is safe. Meanwhile, its growing rate base indicates that the company could continue to enhance its shareholders’ returns through higher dividend payments.
Fortis’s dividend has uninterruptedly grown for 48 consecutive years, while the company expects an annual increase of 6% over the medium term.
Fortis expects its rate base to grow at a CAGR of 6% through 2026, which will expand its high-quality earnings base. Furthermore, strategic acquisitions and increased renewables capacity bode well for growth.
Canadian Utilities
Canadian Utilities (TSX: CU) is an attractive investment for investors seeking a reliable and growing passive income. This utility giant has raised its dividend for 49 years — the highest by any Canadian company — and offers a high yield of 5%.
Its continued investment in regulated and contracted assets and cost-saving initiatives indicate that the company could continue to increase its dividends in the future years. Notably, its low-risk and high-quality regulated and contracted assets account for most of its earnings, implying that its dividend payouts are safe and sustainable in the long term.
