Passive Income: 5 Secure Dividend Stocks to Own Until 2040

Canadians who want security and income should build a passive-income portfolio with dividend stocks like Canadian Utilities Ltd. (TSX:CU).

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Canadians who are hungry for passive income may be tempted to chase equities with the highest dividend yields. However, many of the most dependable income-yielding equities are not found at the top of the list in terms of overall yield. Today, I want to seek to build a quick passive-income portfolio with five of the most secure dividend stocks on the Toronto Stock Exchange (TSX). These are equities that you can depend on for decades to come.

This top dividend stock has achieved annual income growth every year since its IPO

Hydro One (TSX:H) is a Toronto-based electricity transmission and distribution company. It is the largest utility in Ontario, Canada’s most populous province. Hydro One rightfully attracted considerable attention when it moved to a public listing, and it has not disappointed since its initial public offering (IPO) in 2015. Shares of this dividend stock have climbed 6.7% in 2023 as of close on May 10. The stock is up 14% year over year.

This company released its first-quarter (Q1) fiscal 2023 earnings on May 5. Total revenues moved up marginally to $2.07 billion. However, its earnings took a small dip due to higher operation, maintenance, and administrative costs in addition to higher financing charges and other factors. Hydro One has delivered annual dividend growth ever year since its TSX debut. It currently offers a quarterly dividend of $0.296 per share. That represents a 3% yield.

I’m looking to buy the dip in Enbridge for its passive income

Enbridge (TSX:ENB) is the largest energy infrastructure company in North America and one of the true heavy hitters on the TSX. Shares of this top dividend stock are up 0.5% so far in 2023. However, the stock is down 4.3% year over year.

In Q1 2023, Enbridge posted adjusted earnings that were flat year over year at $1.7 billion or $0.85 per common share. Distributable cash flow (DCF) rose to $3.2 billion over $3.1 billion in Q1 FY2022. Enbridge offers a quarterly distribution of $0.887 per share, which represents a tasty 6.6% yield. Passive-income investors should also be happy with its dividend-growth streak that has grown to 28 straight years.

Here’s two utilities that are dividend stock royalty

Utilities provide essential services to Canadians, which have made their corresponding stocks a safe target for decades. That was especially true during the COVID-19 pandemic, as only businesses providing essential services could be depended upon with the world grinding to a halt. A Dividend King is a stock that has achieved at least 50 straight years of dividend growth. Only one stock on the TSX has reached this milestone, while another is right on the precipice. Both are top utility stocks that should pique the interest of passive-income investors.

Canadian Utilities (TSX:CU) is a Calgary-based company that is engaged in the electricity, natural gas, and retail energy businesses in the United States, Australia, and around the world. Its shares have climbed 6.9% so far in 2023. This stock last paid out a quarterly dividend of $0.449 per share, representing a 4.5% yield. Canadian Utilities has delivered 51 straight years of dividend growth.

Fortis (TSX:FTS) is a St. John’s-based utility holding company. This stock has jumped 11% in the year-to-date period. Fortis posted adjusted net earnings per common share of $0.91 in Q1 FY2023 — up from $0.78 in the previous year. This dividend stock has achieved 49 consecutive years of dividend increases. Fortis offers a quarterly distribution of $0.565 per share. This represents a 3.6% yield.

One more stock I’d look to stash for decades

Toromont Industries (TSX:TIH) is the fifth dividend stock that can round out our super secure passive-income portfolio. This Toronto-based company provides specialized capital equipment in North America and internationally. Its shares have jumped 6.7% in 2023. Toromont currently offers a quarterly dividend of $0.43 per share, which represents a modest 1.6% yield. This dividend stock has delivered 33 straight years of 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 Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge and Fortis. The Motley Fool has a disclosure policy.

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