Dividend Aristocrats are my favourite type of stock. These companies have consistently increased their dividends every year for over a decade. In fact, some have been boosting dividends for multiple decades.
This is the consistency you need to generate easy and reliable passive income for life. If that’s your target, here are the top three Dividend Aristocrats that should be on your watch list.
Dividend Aristocrat #1
Fortis (TSX: FTS)(NYSE: FTS) is the gold standard for dividend stocks in Canada. It’s a natural monopoly with fantastic management. That means reliable cash flows for shareholders.
Fortis is a utility company. With operations spread across North America and even the Caribbean, it’s one of the largest energy distributors in the world. Now, the company is investing to boost its already strong position.
By 2026, Fortis management expects to deploy $20 billion in new investments. This includes acquisitions and the development of new facilities in new regions. It also includes roughly $3.8 billion invested in green energy sources.
These investments should safeguard Fortis’s position. It should also add incremental cash flow. In fact, Fortis expects these investments to help it expand dividends by 6% every year until 2026.
Fortis has already increased its dividend for 48 years, so another five isn’t beyond the realm of possibility. That’s why this is a top-notch passive-income stock to keep an eye on.
Dividend Aristocrat #2
BCE (TSX: BCE)(NYSE: BCE) is another excellent Dividend Aristocrat worth keeping an eye on. Canada’s largest telecommunications company has a tight grip on the market. It’s a position that allows it to extract immense profits.
BCE’s dominance is bad news for subscribers, who pay some of the highest data rates in the world. But it’s great news for shareholders, who have enjoyed annual dividend growth for 13 years. BCE’s current dividend yield of 5.98% is also much higher than the market average.
The company’s ongoing investments in rural broadband and 5G should cement its position as a market leader. That means shareholders can expect several more years of dividend growth. Add this Dividend Aristocrat to your passive-income basket.
Dividend Aristocrat #3
Investing in a Dividend Aristocrat is an easy way to make passive income. But if you’re looking for an easier path, you should consider a basket of Dividend Aristocrats. iShares S&P/TSX Canadian Dividend Aristocrats Index ETF (TSX: CDZ) is an excellent example.
This fund holds roughly 93 stocks that have expanded dividends for five years consecutively. The largest holding is energy giant Keyera. The portfolio also includes some real estate funds, utility companies, and bank stocks. Overall, it’s a well-diversified basket of robust dividend stocks.
The fund currently trades at a price-to-earnings ratio of 13 and offers a juicy 3.6% dividend yield. Add this to your passive-income radar.
