It’s raining dividends in the Canadian energy sector as companies distribute record cash flows generated in 2022 to investors, pay down debt, buy back their shares, and raise regular dividends. Although Canadian energy firms dominate the dividend stocks scheduled to increase or pay raised dividends this month, BCE Inc. (TSX:BCE) is among the best dividend growth stocks you can buy for higher dividends and passive income growth in 2023.
I’ll discuss three TSX dividend stocks that you can buy before they pay raised dividends for the first time this year.
Buy BCE stock for juicy dividends
BCE Inc. stock investors will receive a bumped dividend in 2023. The $55 billion Canadian telecommunications firm achieved all its financial targets for 2022 and raised its quarterly dividends rate for 2023 by 5.2% in February to 96.8 cents per share.
The raised dividend payout should yield nearly 6.4% annually. BCE has raised its common stock dividends for 14 consecutive years now.
To receive the first of the increased dividend, you have to buy BCE stock before March 14, and the payments will be mailed on April 17 next month.
Investors should see BCE generate growing free cash flow from its operations after a successful investment program. The company intensified its capital expenditure program and expanded its fiber network to more than 850 thousand locations in 2022. This is the telco’s highest annual retail internet net activations in 16 years. It now boasts a wide 5G network covering more than 82% of Canadians.
If you had invested $10,000 in BCE stock 10 years ago, and consistently reinvested the dividend, you would have more than $21,700 today. BCE stock’s dividends increased investors’ total returns from 29% to more than 117% in a decade. That potential remains and it’s not likely to go away any time soon.
Pick up Parkland shares now for the dividend bump
Parkland Corporation (TSX:PKI) is a dividend growth stock to buy in March as it raises its quarterly dividends for the 11th consecutive year in 2023. The company announced a 4.6% increase to its quarterly dividend to $0.34 per share on March 2, 2023. The raised dividend should yield 4.5% annually. To receive the recently increased Parkland stock dividend, investors have to buy shares before March 21 this month.
The $5.3 billion company distributes fuels and petroleum products, food, and convenience products across Canada and the United States while investing in electric vehicle (EV) charging stations. Business was great in 2022 as Parkland reported 47% year-over-year growth in cash flow from operations, and a strong 220% sequential surge in net earnings for the past year.
Parkland is determined to share its growing earnings with its stock investors. Management is upbeat about the business’s outlook in 2023 and expects operations to generate record adjusted earnings before interest, taxes, depreciation, and amortization (adjusted EBITDA) this year.
If you had invested $10,000 in Parkland stock 10 years ago and reinvested the dividend (even through the severe turbulence of 2020 and 2022), you would have more than $25,000 in your account today. Dividends increased the total return on Parkland stock from 67.3% to 150.3% over the past decade.
Partake in TC Energy’s dividend raise to 6.7%
Canadian oil and gas giant TC Energy (TSX:TRP) stock investors will receive a better yield in 2023. The $57 billion energy giant raised its regular quarterly dividend by 3.3% to $0.93 per share for the first quarter of 2023. The increased dividend should yield 6.7% annually. The company will pay the first quarter dividend on April 28. To receive it, you must buy TC Energy stock before March 30.
TC Energy has raised dividends for 22 consecutive years and averaged a 7.7% dividend growth rate over the past five years.
Dividends raised the total return on TC Energy stock from 14% to more than 82% over the past decade. If you had invested $10,000 in TC Energy stock 10 years ago, you would have nearly $18,300 today – with full dividend reinvestment during the period.
For added convenience, the company has a dividend reinvestment plan (DRIP) that allows investors to receive new common shares (instead of cash) at a 2% discount to the TRP stock market price at the time. The discount could add a new layer of compounded total returns to your portfolio over time.