Dividend stocks can help investors live a more comfortable life. That’s because by investing in dividend stocks, you could generate a stable source of passive income. However, when choosing dividend stocks to hold in your portfolio, it’s important that investors keep an eye on which stocks seem like they can continue to grow those dividend distributions over time. This will help investors stay ahead of inflation.
In this article, I’ll discuss three dividend stocks that are poised for steady growth.
Invest in one of the best dividend stocks in Canada
Fortis (TSX:FTS) may be one of the most impressive dividend stocks available to Canadians today. For those that aren’t familiar, this company provides regulated gas and electric utilities to more than three million customers. It currently operates in Canada, the United States, and the Caribbean. Because utility companies tend to follow a recurring revenue model, companies like Fortis are able to take advantage of a highly predictable and stable revenue stream. That allows them to plan for dividend distributions years in advance.
As of this writing, Fortis holds one of the longest active dividend-growth streaks in Canada (49 years). The company has already announced its plans to continue raising its dividend through to at least 2027 at a rate of 4-6%. In addition, Fortis offers investors a very attractive forward dividend yield of 3.97%. If you’re looking for a dividend stock that could help you grow your passive income, Fortis could be the one for you.
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This is an underappreciated stock
Alimentation Couche-Tard (TSX:ATD) is another stock that dividend investors should heavily consider buying today. This company operates more than 14,400 convenience stores across 24 countries and territories. If you aren’t familiar with this company, you may have seen some of the other stores it operates. This includes Circle K, On the Run, Becker’s, Winks, and more.
What’s very intriguing about Alimentation Couche-Tard is that convenience stores are probably some of the most stable businesses around. Nearly every consumer that enters one of these locations will end up spending money. That allows Alimentation Couche-Tard to take advantage of a very stable revenue stream. As a result, Alimentation Couche-Tard has been able to increase its dividend 10-fold (27% compound annual growth rate) over the past 10 years.
A top dividend stock for your portfolio
Finally, investors should consider buying shares of Canadian National Railway (TSX:CNR). This may be one of the most recognizable companies in Canada. Canadian National operates a railway network that spans from British Columbia to Nova Scotia. All considered, Canadian National operates nearly 33,000 km of track.
Like Fortis, Canadian National has managed to establish a very formidable history of dividend growth. The company has been able to increase its dividend distribution in each of the past 26 years. That makes it one of only 11 TSX-listed companies right now to maintain a dividend-growth streak of 25 years or longer. Although Canadian National only offers a forward dividend yield of 1.96%, its stability and history of growth should be very attractive to investors.
