4 Top Stocks With High Dividend Growth to Buy in 2023 and Hold Forever

Are you planning to start a passive-income stream? These Canadian stocks consistently increase their dividends.

| More on:
growing plant shoots on stacked coins

Image source: Getty Images

Several Canadian stocks have been consistently paying and growing dividends for years. This makes them an attractive investment to start a growing passive-income stream. In this article, I’ll discuss four such underrated dividend stocks that offer steady income amid all market conditions. 

These dividend stocks are also part of the S&P/TSX Canadian Dividend Aristocrats Index, making them a reliable bet. 

Capital Power

Capital Power (TSX:CPX) is a North American wholesale power producer focusing on sustainable energy. It owns approximately 7,500 megawatts (MW) of power-generation capacity across 29 facilities. Thanks to its diversified portfolio and competitive fleet of assets, the company generates strong earnings that allow it to boost shareholders’ returns through higher dividend payments. 

The power producer has increased its dividend for nine consecutive years. Furthermore, Capital Power expects to grow its annual dividend by about 6% through 2025. Its strong pipeline of developmental projects, long-life assets, and power-purchase agreements positions it well to deliver strong shareholders’ returns in the coming years. Investors can earn a solid dividend yield of 5.29% by investing in Capital Power stock near the current levels. 

TC Energy 

TC Energy (TSX:TRP) provides the infrastructure to transport natural gas and crude oil. Thanks to its regulated and contracted assets, TC Energy consistently delivers solid cash flows and boosts its shareholders’ returns through higher dividend payments. 

 This energy company has raised its dividend for 23 years in a row. At the same time, its dividend has grown at a CAGR (compound annual growth rate) of 7%. 

Looking ahead, TC Energy forecasts its dividend to increase by 3-5% per annum on the back of its high-quality asset base. Moreover, its utility-like business model, $34 billion secured growth projects, and energy transition opportunities bode well for its future earnings and dividend growth. By investing in TC Energy stock, investors can earn a high yield of 6.56%. 

Fortis 

Fortis (TSX:FTS), undoubtedly, is a must-have dividend stock to earn reliable passive income that will grow with you. It operates a low-risk electric utility business that allows it to enhance its shareholders’ returns through higher dividend payments.

Impressively, Fortis raised its dividend for 49 consecutive years, thanks to its growing rate base. Moreover, the company forecasts its rate base to grow by a CAGR of over 6% through 2027, which will drive its future dividend payments. Fortis expects to grow its dividend at an average annualized rate of 4-6% through 2027. Meanwhile, it offers a well-covered dividend yield of 3.76%. 

Telus 

Investors can bet on the diversified telecommunications company Telus (TSX:T) for a growing dividend income. Thanks to its profitable growth, Telus has a solid track record of enhancing shareholders’ returns through higher dividend payments and share repurchases. 

Since 2004, Telus has returned about $18 billion to its shareholders through dividend. Meanwhile, through its multi-year dividend-growth program, the company intends to increase its dividend by 7-10% per year. 

Telus’s growing subscriber base, lower churn rate, expansion of 5G services, and investments in network infrastructure will likely drive its earnings and support higher dividend payments. Investors can earn a reliable yield of 4.97% near current levels. 

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 Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool recommends Fortis and TELUS. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Growing plant shoots on coins
Dividend Stocks

Better Buy in August: Passive-Income or Growth Stocks?

With a steady mix of passive-income and growth stocks, investors can create a prime portfolio even during market volatility.

Read more »

a person prepares to fight by taping their knuckles
Dividend Stocks

3 Defensive TSX Stocks for Lower-Risk Investors

These three TSX stocks are all high-quality companies with defensive businesses, making them ideal for low-risk investors.

Read more »

ETF chart stocks
Dividend Stocks

2 Canadian ETFs to Buy and Hold Forever in Your TFSA

ETFs like iShares Canadian Quality Dividend ETF (TSX:DIV) have delivered admirable total returns.

Read more »

TFSA and coins
Dividend Stocks

How to Use Your TFSA to Earn $5,000 Per Year in Tax-Free Income

Canadian stocks like Canadian National Railway (TSX:CNR) can pay substantial amounts of dividends.

Read more »

money cash dividends
Dividend Stocks

Beat the TSX With This Cash-Gushing Dividend Stock

Here are some key reasons why this top Canadian dividend stock could continue to outperform the TSX Composite benchmark in…

Read more »

financial freedom sign
Dividend Stocks

3 Stocks to Buy Now That Could Help You Retire a Millionaire

These three stocks are all reliable and have years of growth potential, making them some of the best stocks to…

Read more »

Target. Stand out from the crowd
Dividend Stocks

This 4.1 Percent-Yielding Dividend Stock Remains a Top Choice for Passive Income

Canadian Natural Resources offers shareholders a tasty dividend yield of over 4% and has grown its dividends by 21% over…

Read more »

dividends grow over time
Dividend Stocks

1 Magnificent Dividend Stock That’s Down 10% and Trading at a Once-in-a-Decade Valuation

This dividend stock may be down around 10%, but there is a huge future opportunity for those wanting growth as…

Read more »