There are tonnes of Canadian dividend stocks to buy and several that offer consistent dividend growth. For example, the Canadian Dividend Aristocrats list has more than 80 stocks, and these are just some of the largest and most consistent dividend stocks in Canada.
Earning dividends from your stocks can boost your income considerably. But when the stocks you own are consistently increasing their dividend payments each year, it not only allows you to grow your capital faster, but in a high inflation environment such as today, it’s crucial just to help you keep up with rising costs.
If you’re looking to buy top Canadian dividend-growth stocks, here are two that are due for a dividend increase soon.
One of the best defensive dividend stocks to buy with tonnes of long-term growth potential
One of the best and safest Canadian dividend stocks that you can buy and hold for years is Algonquin Power and Utilities (TSX:AQN)(NYSE:AQN). Algonquin is a utility stock that also has renewable energy generation assets making up about 30% of its business.
Both of these industries are highly defensive and generate tonnes of cash flow. So, it’s no surprise that Algonquin is a Canadian Dividend Aristocrat.
Finding stocks on the Dividend Aristocrats list doesn’t guarantee they will continue to increase dividends as they have in the past. As is always the case when it comes to investing, past performance is no guarantee of future results.
So, it’s still crucial to do a tonne of research and make sure the stocks you are buying are of the highest quality. With that being said, Algonquin’s operations are well diversified, and it continues to have tonnes of growth potential thanks to its renewable energy assets.
When it comes to the dividend, typically, Algonquin has had a payout ratio between 80% to 90% of its adjusted earnings per share (EPS). That might be high, but for a low-risk stock like Algonquin, it’s manageable. And considering that guidance from the company suggests that Algonquin will grow its adjusted EPS by 5% in 2022, there could certainly be an increase to the dividend on the horizon.
So, with the stock already offering investors a yield of more than 4.3% and potentially on the brink of a dividend increase, it’s certainly one of the best Canadian stocks to buy in this market environment.
A top Canadian real estate stock for reliable passive income
Another high-quality Canadian dividend stock to buy that’s an incredibly safe investment and could also be on the brink of an increase in its distribution is CT REIT (TSX:CRT.UN).
One reason that CT REIT is such an excellent long-term dividend stock to buy is that it’s constantly growing its revenue and its income. In fact, the REIT hasn’t had a single quarter of negative revenue growth in the last six years, including through the pandemic.
And because CT REIT typically keeps its payout ratio at about 75% of its adjusted funds from operations, as that naturally grows, so too can the distribution.
Looking back at CT REIT’s historical distribution payments, which it makes monthly — an attractive feature for investors — CT REIT has typically increased its payments as we head into the summer months.
After 10 months straight at an annual distribution of $0.84, and considering that CT REIT continues to grow its revenue and income well, I wouldn’t be surprised to see an increase in the coming months.
CT REIT, especially lately, has proven what a high-quality and resilient stock it can be. If you’re a dividend investor looking for top stocks to buy now, even without a potential distribution increase on the horizon, CT REIT is still one of the best investments you can buy now.
