3 Stocks Where the Dividends Don’t Stop

Given their solid underlying businesses, these three companies generate stable cash flows, thus allowing them to raise dividends consistently.

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Year to date, the S&P/TSX Composite Index has increased by 6.2%. Easing inflationary pressure and lower interest rate hikes appear to have improved investors’ sentiments, driving the index higher. However, a strong labour market and higher personal consumption expenditures in January have made investors nervous. They expect the central banks to continue their monetary tightening initiatives in the coming months.

So, given the uncertain outlook, investing in fundamentally strong companies with a healthy record of raising their dividends is prudent. Look no further. The following three stocks have raised their dividends consistently for over 15 years.


First on my list would be Enbridge (TSX:ENB), which has been paying dividends uninterruptedly for the last 68 years. The midstream energy company operates over 40 diverse revenue-generating streams, with around 98% of its cash flows underpinned by cost-of-service and take-or-pay contracts. Also, approximately 80% of its EBITDA (earnings before interest, tax, depreciation, and amortization) is inflation-indexed, thus protecting against the price rise.

Supported by a regulated asset base, the company’s cash flows are stable and predictable, thus allowing it to raise its dividends at a CAGR (compounded annual growth rate) of 10% for the last 28 years. Its dividend yield for the next 12 months is a juicy 6.72%.

Meanwhile, Enbridge put around $4 billion of projects into service last year and sanctioned around $8 billion of new organic growth capital. Besides, it could also benefit from the growing energy demand and increased LPG (liquified petroleum gas) exports from North America. So, considering its impressive underlying business, healthy growth prospects, and solid balance sheet, I believe Enbridge’s future payouts are safe.

Canadian Utilities

Canadian Utilities (TSX:CU) is a diversified energy infrastructure company that meets the electric and natural gas needs of over 2 million customers. It also operates power-producing facilities, with 83% of its assets underpinned by long-term contracts. Supported by the low-risk utility and regulated assets, the company’s cash flows are stable and predictable, thus allowing it to raise its dividends for a record 51 consecutive years. CU stock’s dividend yield for the next 12 months stands at 5.1%.

In January, Canadian Utilities acquired a portfolio of wind and solar power-producing facilities from Suncor Energy in Alberta and Ontario. In other renewables ventures, it has commissioned two hydrogen projects in Australia. Further, the company’s management expects to grow its rate base at a CAGR of 2% over the next three years to $16 billion by 2025. So, I expect these growth initiatives to boost its cash flows, thus allowing it to maintain its dividend growth.


My final pick would be BCE (TSX:BCE), which has raised its dividends by over 5% annually for the last 15 years. Its yield for the next 12 months stands at 6.4%. Amid digitization and increased adoption of remote working and learning, the demand for telecommunication services is rising, expanding the total addressable market for the company. Meanwhile, the company has adopted an aggressive capital investment strategy to meet the rising demand.

Supported by these investments, BCE has expanded its 5G service to reach 82% of the Canadian population while completing 80% of the planned broadband internet buildout program by the end of 2022. These investments have expanded its subscriber base across wired and wireless segments, driving its financials. I expect the growth to continue as its continued capital investments help meet the growing demand. So, I believe BCE is well-equipped to continue its dividend growth.

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 Rajiv Nanjapla has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy.

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