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

Are you looking for stocks you can buy and forget, while they keep giving you returns? Then these high dividend growth stocks are worth a look.

edit Balloon shaped as a heart

Image source: Getty Images.

Investing with an objective helps you plan your investments better. You choose your stocks based on your needs. Someone might like fast food, while someone else might prefer a full meal. It depends on your preference, the expected outcome, and risk appetite. Today, we will discuss some dividend stocks that you can buy today with $4,000 to $6,000 and forget about them for the next five to seven years. 

Four high-dividend growth stocks for 2023 

What type of companies pay dividends and grow them annually? Mostly infrastructure companies that develop income-generating assets tend to pay regular dividends. They grow dividends as they bring new income-generating projects online. The income can be in the form of rent, tolls, subscriptions, or utility bill payments. Here are my top dividend growth stock picks for 2023 from four sectors. 

Dividends from financial services 

Power Corporation of Canada (TSX:POW) earns income from dividends paid by its two major holding companies, Great-West Lifeco and IGM Financial. They both trade on the TSX and pay dividends. But compared to them, POW has a higher dividend yield and better dividend growth history. It has been paying dividends since 1998 and growing them as well. However, there were a few years, like the 2008 financial crisis, when POW paused its dividend growth but continued paying the same dividend amount per share. 

I prefer Power Corporation over its subsidiaries because the parent’s risk is limited to its holding in the company. Moreover, POW has a diversified portfolio with stakes in European investment firm Groupe Bruxelles Lambert and alternative asset manager Sagard. This diversified portfolio reduces POW’s downside risk and makes it a stock to buy and forget. 

Dividends from real estate

The main source of income for REITs is rent from tenants. Among all properties, the rent of retail stores is the most attractive. But not many REITs grow dividends as they struggle to maintain high occupancy rates. But occupancy is not an issue for CT REIT (TSX:CRT.UN) as more than 90% of its properties are leased by its parent Canadian Tire

The retailer expands its stores and adds more stores through CT REIT. This is tax-efficient because the retailer can show the rent it pays to CT REIT as a business expense and reduce its taxable income. And as the REIT enjoys tax exemption, it passes on the rent to shareholders through monthly distributions. 

CT REIT’s new property expansion and development always has a tenant. Thusly, it has been growing its dividends at an average annual rate of around 3% since 2013, including during the pandemic. You can buy and forget this stock for at least eight years, as that is the average lease term CT REIT has with Canadian Tire. 

A dividend aristocrat among energy stocks 

While the above two are good dividend players, they can’t beat Enbridge (TSX:ENB), which has been paying dividends for 68 years and growing them at an average annual rate of 10% for 28 consecutive years. The company’s pipeline infrastructure is the largest in North America, which means it benefits from Canada’s oil and gas exports to the United States. 

Moreover, Enbridge has a good track record of keeping its pipeline project closer to the estimated budget. It earns revenue from the toll rate it collects for transmitting oil and gas, and this rate is regulated. As long as Canada remains a key oil and gas supplier to the United States, you can buy and forget about Enbridge stock. It will keep growing your dividend every year. 

More royalty among telecom stocks

Every stock has its specialty, and Telus Communications’ (TSX:T) specialty is operating in a market dominated by three players. Moreover, telecom rates are not regulated, and competitors don’t compete on price. Consequently, Canada has some of the most expensive broadband plans. Telus keeps expanding its infrastructure to grow its subscriber base. It has been upgrading its network to 5G. And since 5G enables the proliferation of internet-connected devices, the telco will earn more revenue. 

A similar trend in the 4G upgrade in 2011 helped Telus grow its dividend. It has been growing dividends by 7% from 2011 to date. You can buy and forget Telus stock until there comes a time when internet usage reaches its saturation. 

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 Puja Tayal has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge and TELUS. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Canadian Dollars
Dividend Stocks

Where I’d Invest a $10,000 Windfall Right Now

This investing strategy increases returns while reducing risk.

Read more »

money cash dividends
Dividend Stocks

2 Dividend Stocks for Passive Income

Both of these dividend stocks are good sources of long-term passive income. They also currently trade at good valuations.

Read more »

Close up shot of senior couple holding hand. Loving couple sitting together and holding hands. Focus on hands.
Dividend Stocks

These 3 Canadian Dividend Stocks Are a Pensioner’s Best Friend

Are you a pensioner looking for dividend stocks to add to your portfolio? Here are three top picks!

Read more »

Dividend Stocks

3 No-Brainer Stocks to Buy With $200 Right Now

Are you looking to invest $200 in stocks right now? Here are three no-brainer stocks to invest your money in…

Read more »

Dividend Stocks

TFSA Investors: How to Earn $350/Month in Passive Income

Add 7.78%-yielding Enbridge stock and 4.5%-yielding Fortis to your TFSA for a generous passive income stream for the long term.

Read more »

A golden egg in a nest
Dividend Stocks

Passive Income: How to Earn $200 Per Month in Your TFSA Portfolio

Who doesn't want a little extra passive income? Here's one way you could earn $200/month of diversified, tax-free income!

Read more »

data analytics, chart and graph icons with female hands typing on laptop in background
Dividend Stocks

2 Dividend Stocks That Are Insanely Oversold Right Now

BCE (TSX:BCE) and another battered dividend stock are ripe for buying for brave bargain hunters.

Read more »

Growing plant shoots on coins
Dividend Stocks

3 Dividend Stocks to Buy While They Are on Sale

These top TSX dividend stocks now offer great yields.

Read more »