The 5 Best TSX Dividend Stocks to Own for a Lifetime of Passive Income

Investors seeking a regular passive income, regardless of where the market goes can consider investing in these five TSX stocks.

A plant grows from coins.

Source: Getty Images

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. 

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. 

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 Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool recommends BANK OF NOVA SCOTIA, Enbridge, and FORTIS INC.

More on Dividend Stocks

money cash dividends
Dividend Stocks

This 8.39% Dividend Stock Can Pay $100 Cash Every Month

Consider investing in this monthly dividend stock at current levels to lock in high-yielding monthly distributions to create a good…

Read more »

TFSA (Tax free savings account) acronym on wooden cubes on the background of stacks of coins
Dividend Stocks

Here’s the Average TFSA Balance in 2024

The Bank of Montreal (TSX:BMO) says that the average TFSA balance is $41,510, far below the maximum.

Read more »

A glass jar resting on its side with Canadian banknotes and change inside.
Dividend Stocks

Investors: Here’s How to Make $1,000 Each Month in Retirement

Here's how you can easily make $1,000 in monthly passive income in retirement in Canada, without taking on too much…

Read more »

man touches brain to show a good idea
Dividend Stocks

3 No-Brainer TSX Stocks I’d Buy Right Now Without Hesitation

Three TSX stocks that continue to overcome massive headwinds and beat the market are no-brainer buys right now.

Read more »

calculate and analyze stock
Dividend Stocks

TFSA Investors: 2 Top TSX Dividend Stocks to Buy on a Dip and Hold Forever

These top TSX dividend stocks now offer attractive yields and big potential capital gains.

Read more »

grow money, wealth build
Dividend Stocks

1 Dividend Stock to Buy for Growth and Stay for a 5.5% Yield

This dividend stock has been rising higher, but more could certainly be on the way. Now is the time to…

Read more »

A worker uses a double monitor computer screen in an office.
Dividend Stocks

2 Affordable Passive-Income Stocks That Pay Monthly

Are you looking for some passive-income stocks to build a recurring income stream? Here are two great options you can…

Read more »

woman data analyze
Dividend Stocks

Magna International Is Starting to Get Ridiculously Oversold

An undervalued stock with strong fundamentals and visible growth potential is a screaming buy for long-term gains.

Read more »