Among all the ways to earn passive income in Canada, dividend investing could arguably be among the best ones. While investing in high-growth stocks could help you generate eye-popping returns in some cases, fundamentally strong dividend stocks help your wealth grow at a steady and consistent pace in the long run. In addition, most companies with a well-proven track record of rewarding their investors with healthy dividends usually have a strong business model to support financial growth.
In this article, I’ll highlight one such unstoppable TSX dividend stocks you can buy in Canada right now to hold forever.
Image source: Getty Images
A top TSX dividend stock to hold forever for passive income
You must pay close attention to a stock’s financial growth trends and future growth prospects before investing in it for the long term to generate passive income. This way, you can be sure that you’re not increasing your risk exposure by pouring your hard-earned savings into some fundamentally weak companies. Keeping these ground rules in mind, Mullen Group (TSX:MTL) could be one of the best TSX dividend stocks to own forever for passive income.
It’s an Okotoks-based company with a large network of independently operated logistics services businesses across North America. It currently has a market cap of $1.4 billion, as its stock trades at $14.75 per share with about 27% year-to-date gains, despite the recent broader market selloff. Mullen Group also focuses on actively acquiring small businesses within its domain to benefit by improving their performance.
At the current market price, this top TSX dividend stock has an attractive yield of around 4.9%. And the company distributes its dividend payouts on a monthly basis, which could become a reliable source of monthly passive income for you in the long term. Now, let me quickly highlight some key fundamental factors that make it one of the best dividend stocks on the Toronto Stock Exchange to own forever.
Strong future growth prospects
In the last few years, Mullen Group’s business network has expanded significantly. And the positive impact of this expansion also clearly reflects in its recent financial growth trend. That’s one of the key reasons why in five years between 2016 and 2021, its total revenue rose 43%, and its adjusted earnings went up positively by 44%.
While inflationary pressures tend to affect its profitability, the recent increases in the general rate for its services have helped the company maintain a solid financial growth trend in 2022. In the September quarter, Mullen’s revenue grew by 20% from a year ago to $518 billion, marking its highest third-quarter revenue ever. Despite only a double-digit increase in revenue, higher general rates pushed the company’s adjusted earnings up by a solid 117% in the last quarter to $0.39 per share.
I expect Mullen Group’s profit margin to expand further in the coming years, as most businesses are willing to pay high rates for freight services amid the ongoing global supply chain disruptions.
Bottom line
Apart from these positive factors, Mullen Group’s strong balance sheet and resilient cash flows should help it maintain a strong financial growth trend and expand its business more in the long run. This is one of the key reasons why I expect this monthly TSX dividend stock to continue soaring, making it worth owning forever to earn passive income in Canada.
