Dividend stocks offer regular passive income. Further, several Canadian stocks offer visibility over their future payouts, making them a reliable investment to earn higher dividends with each passing year. Against this background, I’ll discuss five TSX stocks in this article that offer high dividend growth, making them attractive investments to generate regular cash.
However, investors should note that dividend payments are not guaranteed. Thus, one should focus on diversification to reduce risk. Let’s begin.
Telus
Telus (TSX: T), with its attractive dividend growth history and profitable growth, is a solid stock to earn worry-free income. This telecom company has increased its dividend 24 times since 2011 under its multi-year dividend-growth program. Impressively, Telus paid about $18 billion in dividends since 2004.
Looking ahead, Telus intends to increase its dividend by 7-10% per annum through 2025. Its growing subscriber base, expansion of 5G services, lower mobile churn rate, and investments in network infrastructure will drive its earnings and, in turn, future dividend payouts. It offers a lucrative yield of 5.7% (based on its closing price of June 23).
Capital Power
Capital Power (TSX: CPX) increased its dividend for nine years in a row. Furthermore, this North American wholesale power producer plans to grow its annual dividend by about 6% through 2025. Its diversified long-life assets, power-purchase agreements, and solid pipeline of developmental projects augur well for long-term growth and dividend payments.
Capital Power’s diversified renewable asset portfolio, low-risk business model, and growing cash flows will likely cushion its earnings and dividend payments. Investors can earn a yield of 5.45% by investing in Capital Power stock near the current levels.
Fortis
Next up is Fortis (TSX: FTS), which is famous for its stellar dividend payments history. This regulated electric utility company generates predictable cash flows while its business remains relatively immune to economic cycles. Thanks to its low-risk business model and regulated cash flows, it increased its dividend for 49 consecutive years.
Fortis expects to grow its dividend by 4-6% annually through 2027, reflecting a higher rate base. Notably, the company’s rate base is projected to increase by an average annualized growth rate of 6% through 2027. This will expand its regulated asset base and drive earnings. Fortis stock offers a well-protected dividend yield of close to 4%.
Brookfield Renewable Partners
Pure-play renewable energy company Brookfield Renewable Partners (TSX: BEP.UN) could be a solid addition to your income portfolio. Its diversified portfolio of high-quality renewable power assets, robust development pipeline (nearly 126,000 megawatts of renewable power assets), power-purchase agreements, and long-term contracts with protection against inflation enable the company to offer higher dividends.
Brookfield Renewable Partners has increased its dividend at an average annualized growth rate of 6% in the past two decades. Furthermore, it expects to increase its dividends by 5-9% annually in the coming years. It offers a yield of 4.7%.
AltaGas
Shares of energy infrastructure company AltaGas (TSX: ALA) could be a solid addition to your portfolio to earn a growing dividend income. Its balanced mix of low-risk utility and midstream assets generates substantial cash flows to support higher payouts. AltaGas’s earnings sport a compound annual growth rate of 12% since 2019, enabling it to enhance its shareholders’ return through higher payouts.
The company expects to hike its annual dividend by 5-7% through 2026 on the back of its higher earnings. Its rate base is projected to increase by 8-10% per annum in the medium term, driving its earnings higher. Further, the strength in its midstream operations will likely support its growth. AltaGas stock offers a dividend yield of 4.91% at current levels.
