Investors can generate regular passive income, regardless of where the market goes. Thankfully, several Canadian companies are known for their solid dividend payment and growth history, even amid a tough operating environment.
So, for investors seeking worry-free passive income, I have shortlisted five stocks that have paid regular dividends for at least 25 years. Further, these Canadian companies have resilient earnings and cash flows, implying they could continue to boost shareholders’ returns through solid dividend payments.
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Canadian Utilities
Canadian Utilities (TSX: CU) has paid and increased its dividend for 50 years. Its solid dividend payment and growth history make it a must-have passive-income stock in all market conditions. Its low-risk business, growing rate base, and sustainable payouts indicate that Canadian Utilities is well positioned to hike its dividend further.
Canadian Utilities’s regulated and contracted assets generate predictable cash flows that comfortably cover its payouts. Meanwhile, it offers a well-protected dividend yield of 4.4%.
Scotiabank
Top Canadian bank stocks have a solid track record of dividend payments. Among the banking giants, Scotiabank (TSX: BNS)(NYSE: BNS) has paid a dividend since 1833. Further, its dividend has grown at an annualized rate of 6% in the last decade. Its solid dividend payment history and ability to consistently increase its earnings (grew at a compound annual growth rate, or CAGR, of 5% since 2011) make it a solid stock for passive income.
Scotiabank’s exposure to high-growth banking markets, diversified revenue base, rising interest rate environment, and operating leverage will drive its earnings and dividend payments. Also, its high-quality assets and solid balance sheet bode well for growth. One can earn a lucrative dividend yield of 5.1% by investing in Scotiabank stock.
Bank of Montreal
Bank of Montreal (TSX: BMO)(NYSE: BMO) is another reliable stock for steady passive income. It has paid a dividend for 193 years — the longest track record of dividend payments among Canadian companies. Moreover, Bank of Montreal’s dividend increased at a CAGR of 4% in the past decade.
Bank of Montreal’s diversified revenue sources, ability to drive loans and deposits, and increase in interest rate support its earnings growth. Moreover, its solid asset base and improved efficiency will drive its earnings and dividend payouts. Bank of Montreal stock offers a dividend yield of 4.2%, which is safe.
Fortis
Fortis (TSX: FTS)(NYSE: FTS) has paid and raised its dividend for 48 years. Its rate-regulated assets generate predictable cash flows that drive its dividend payments. Its solid capital program, growing rate base (expected to grow at a CAGR of 6%), and increase in renewable power-generation capacity augur well for future dividend growth.
Fortis sees a 6% annual growth in its dividend through 2025. Further, as almost all of its earnings come from regulated assets, its payouts are well protected. Fortis offers a dividend yield of 3.5%.
Enbridge
Enbridge (TSX: ENB)(NYSE: ENB) increased its dividend at a CAGR of 10 in the last 27 years. Further, it has paid a dividend for 67 years. Its diverse cash streams, high-quality renewable and conventional energy assets, multi-billion secured projects, solid backlogs, and inflation-protected earnings bode well for future growth.
Enbridge stock offers a dividend yield of more than 6%. Meanwhile, its target payout ratio of 60-70% of its distributable cash flows is sustainable in the long term.
