Dividend Investors: 2 Stocks for Decades of Passive Income

Add these two TSX dividend stocks to your self-directed portfolio to generate passive income for decades.

| More on:
bulb idea thinking

Image source: Getty Images

There are several approaches to stock market investing that Canadians can take to achieve their short- and long-term financial goals.

Putting your money to work in the stock market can help you do everything from building a self-directed retirement portfolio to creating a passive-income stream. Income-generating assets like dividend stocks offer the best opportunity to create a passive-income stream in your investment portfolio.

When it comes to dividend investing, the Canadian stock market has no shortage of options to consider. The TSX boasts several high-quality stocks with long histories of paying shareholders their dividends and growing payouts each year. If you want to create a passive-income stream, you must identify, invest in, and hold shares of dividend stocks capable of reliably paying you for decades.

Today, we will look at two Canadian Dividend Aristocrats you can add to your portfolio for this purpose. Not only do the two dividend stocks pay investors regularly, but the underlying companies have also increased payouts each year for over 20 years.


Fortis (TSX:FTS) is a $27.31 billion market capitalization utilities holding company. The company owns and operates a portfolio of natural gas and electricity utility businesses across Canada, the U.S., Central America, and the Caribbean.

Since it provides essential services, Fortis stock can continue generating stable income, regardless of the market cycle. Granted, it cannot deliver stellar growth through capital gains in bull markets. Still, Fortis stock can offset losses during bear markets due to its stability.

Fortis generates most of its revenue through long-term contracted assets in highly rate-regulated markets. It means the stock creates predictable cash flows that the company’s management can use to fund its capital programs, quarterly payouts, and grow its dividends comfortably.

As of this writing, Fortis stock trades for $56.86 per share and boasts a juicy 3.97% dividend yield. It has increased its payouts for the last 49 years and is on track to hit the 50-year mark.

Canadian National Railway

Canadian National Railway (TSX:CNR) is another Canadian Dividend Aristocrat that can earn you passive income for decades. In operation for over a century, it has paid dividends to its shareholders since 1997 and increased its payouts annually for the last 20 years. It has raised its payouts by a 16% compounded annual growth rate (CAGR).

The $105.44 billion market capitalization railway operator owns one of the largest railway networks in North America. Over the last 100 years, CN Railway has built infrastructure that no other player in the industry can match. Enjoying a strong competitive moat, immense pricing power, and providing a service essential to the economy, CN Railway’s revenue is secure.

As of this writing, CN Railway stock trades for $156.28 per share and pays at a meagre but sustainable 2.02% dividend yield. While it offers a low-yielding payout than many other TSX dividend stocks, it offers stability and reliability that few can match.

Foolish takeaway

By building a massive portfolio of dividend stocks, you can earn a substantial amount in dividend income. If you remain invested for decades, you can watch your account balance grow. To accelerate wealth growth, consider reinvesting the payouts to purchase more shares of the dividend stocks.

By doing this, you can unlock the power of compounding to increase your portfolio’s size and earn even more through dividends.

Fortis stock and CN Railway stock boast lengthy track records, solid business models, stable income, and dividend-growth streaks. These two stocks can be excellent foundations for such a self-directed portfolio.

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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Canadian National Railway and Fortis. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Various Canadian dollars in gray pants pocket
Dividend Stocks

Passive Income: How to Make $90 Per Month Tax Free

You can add this amazing Canadian monthly dividend stock to your TFSA now to generate $90 in tax-free monthly passive…

Read more »

A golden egg in a nest
Dividend Stocks

Investing for Retirement? Check Out These Dividend-Paying Stocks in Canada

Dividend-paying stocks like First National Financial are on sale in June 2023.

Read more »

The sun sets behind a high voltage telecom tower.
Dividend Stocks

Fortis Stock Is a Steady Dividend Player for Your Energy Portfolio

You can rely on Fortis stock for growing dividend income. Aim to buy the stock on market corrections to boost…

Read more »

Path to retirement
Dividend Stocks

Investing for Retirement? These Dividend Stocks Can Help You Get There

TD Bank and Brookfield Renewable Partners are two solid dividend-growth stocks to hold for decent total returns through retirement.

Read more »

Happy family father of mother and child daughter launch a kite on nature at sunset
Dividend Stocks

Parents: Here’s How to Boost Your Monthly Income

Parents, you have enough to worry about. But if you can put aside even $40 per month, that can create…

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

Looking for a Reliable Retirement Income? Consider These Dividend-Paying Stocks

Investors looking to establish a reliable retirement income have no shortage of options to choose from. Here's a trio of…

Read more »

edit Person using calculator next to charts and graphs
Dividend Stocks

3 Oversold Dividend Stocks That Could Make You Rich When They Bounce Bank

Don't wait around for these oversold dividend stocks to bounce back, each certainly will, which is why now is the…

Read more »

A small flower grows out of a concrete crack.
Dividend Stocks

Down 8% Last Month, Canadian Tire Stock Is a Deal Heading Into June 2023

May wasn't a good month for the stock, but June has been different from the beginning and may present an…

Read more »