Dividend stocks are a proven source of passive income. However, not all dividend-paying stocks are reliable, and only a few have the potential to consistently enhance shareholders’ returns for decades. I’ll focus on the five best dividend stocks with solid dividend payment histories. Further, these Canadian corporations have businesses that generate resilient cash and earnings to support future payouts.
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Algonquin Power & Utilities
Utility company Algonquin Power & Utilities (TSX: AQN)(NYSE: AQN) has paid and raised its dividend for 12 years. Moreover, its predictable cash flows from the rate-regulated assets indicate that it could continue to enhance its shareholders’ returns through regular dividend payments. Given its low-risk business, Algonquin Power stock is one of the safest stocks to invest in for worry-free passive income.
Algonquin Power’s earnings increased at an average annualized rate of 11.1% in the last five years. Further, its growing rate base will support future earnings growth that would drive its payouts. Investors can secure a dividend yield of 5.1% by investing in it near current price levels.
Toronto-Dominion Bank
With a dividend payment history of 164 years, Toronto-Dominion Bank (TSX: TD)(NYSE: TD) is a solid passive-income stock. Further, its ability to grow its earnings has allowed it to increase its dividend at a CAGR (compound annual growth rate) of 11%, which is encouraging.
Its diversified revenue base, ability to grow volumes, and strong credit performance will support its future earnings. Further, its solid balance sheet and efficiency savings bode well for future payouts. Toronto-Dominion Bank offers a dividend yield of 4%.
Enbridge
Enbridge (TSX: ENB)(NYSE: ENB) is a top Canadian dividend stock to generate reliable passive income. The company has a dividend-growth payment and growth history of 67 and 27 years, respectively. Further, it is yielding over 6%, making it a lucrative bet at current levels.
Its over 40 diversified cash sources, contractual arrangements to reduce volume and price risk, solid energy demand, and higher asset utilization rate will drive its future payouts. Further, its solid mix of conventional and renewable assets and multi-billion-dollar secured capital projects will drive its distributable cash flows and dividend.
Fortis
Fortis (TSX: FTS)(NYSE: FTS) is a must-own stock for investors looking for a reliable passive income for life. This utility company has paid and increased its dividend for 48 years. Furthermore, it sees a 6% annual growth in its dividend through 2025.
Fortis generates 99% of its income from rate-regulated utility assets. This implies that its payouts are well covered. Further, through its secured capital program, Fortis continues to expand its rate base, which drives its income and dividend payments. Looking ahead, Fortis projects its rate base to increase at an average annualized rate of 6% through 2026. Meanwhile, it offers a dividend yield of 3.6%.
Canadian Utilities
Canadian Utilities (TSX: CU) has the longest dividend-growth history among all Canadian corporations. It increased dividend for 50 years, and its rate-regulated assets indicate that Canadian Utilities could continue to boost its shareholders’ returns through dividend payments in the coming years.
Its regular investments in contracted and regulated assets drive its earnings base, supporting higher dividend payments. Further, its conservative business mix implies that its dividend yield of 4.3% is well protected.
