3 Dividend Stocks You Can Safely Hold for Decades

Hold these dividend stocks for decades to earn worry-free passive income.

| More on:

Image source: Getty Images

Investors looking for shares of dividend-paying companies they can hold for decades and generate worry-free passive income could concentrate on those capable of maintaining and increasing payouts in all market conditions. Further, investors should consider management’s commitment to return cash to shareholders, sustainability of the payouts, and attractive yield. 

Thankfully, the TSX has several fundamentally strong stocks with a consistent track record of dividend payment and growth for decades. Further, these companies maintain sustainable payout ratios and are offering decent yields near the current levels. 

With this background, let’s look at three Canadian stocks you can hold for decades.

Enbridge

Enbridge (TSX:ENB) is one of the top dividend stocks to buy and hold for decades. It engages in the transportation and distribution of oil and natural gas. ENB owns diverse revenue streams that enable it to generate solid distributable cash flow (DCF) to support its payouts. 

What stands out is the management’s commitment to enhancing its shareholder’s value. Notably, Enbridge’s leadership sees growing its dividends as an essential aspect of its investor value proposition, implying it could continue to increase its dividend in the coming years. 

The company has been paying dividends for over 69 years. Moreover, it has increased it for 29 consecutive years. Furthermore, it offers a yield of 7.8% based on its closing price of $47.14 on March 4. 

The company’s diversified cash flows, continued investments in clean energy and conventional assets, power-purchase agreements, and regulated cost-of-service tolling frameworks provide a solid foundation for DCF growth. Further, its multi-billion-dollar projects are slated to come into service in the upcoming years, driving its cash flows and dividend payments. 

Fortis 

Investors could add shares of the electric utility company Fortis (TSX:FTS) to earn worry-free income that will likely grow with them. The company owns a low-risk, regulated utility business that generates predictable cash flows regardless of economic situation. This allows the company to increase dividend distributions, thereby enhancing shareholder returns. Also, its defensive business model makes its stock less volatile, providing stability to investors’ portfolios.

The company has an impressive dividend growth history, which supports my optimistic outlook. For instance, this utility company has uninterruptedly raised its dividend for 50 years. Furthermore, its distributions are protected by its regulated asset base. 

Through its secured capital projects, Fortis continues to expand its rate base, which will drive its earnings and dividend payments. It expects its rate base to grow at an average annualized growth rate of 6.3% through 2028. During the same period, its dividend is forecasted to increase by 4-6% annually. Fortis stock currently offers a yield of 4.5%.

Canadian Utilities 

With its stellar track record of dividend growth, Canadian Utilities (TSX:CU) is a must-have stock to buy and hold for decades to generate passive income. It operates a utility and energy infrastructure business with the lengthiest track record of dividend growth among all Canadian companies. Notably, Canadian Utilities has raised its dividend every year in the last 51 years. 

Currently, CU stock pays a quarterly dividend of $0.453 a share, reflecting a yield of 5.8% based on the closing price of $30.79 on March 4.

Looking ahead, Canadian Utilities’s diverse revenue streams and contracted and regulated assets will enable the company to generate sustainable earnings and pay higher dividends. The company continues to invest in regulated utility and energy infrastructure projects, which will expand its earnings base and support dividend distributions. 

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 Enbridge and Fortis. The Motley Fool has a disclosure policy.

More on Dividend Stocks

top TSX stocks to buy
Dividend Stocks

Passive Income: How Much Should You Invest to Earn $500 Every Month?

These two Hamilton ETFs could be the perfect way to achieve modest passive-income potential.

Read more »

Growing plant shoots on coins
Dividend Stocks

3 Growth Stocks That Could More Than Double Their Revenue by 2025

Three growth stocks outside the tech sector are strong buys for their massive revenue growth potential by 2025.

Read more »

Payday ringed on a calendar
Dividend Stocks

These 2 TSX Dividend Machines Pay You Monthly

Here are two of the best monthly dividend stocks you can buy in Canada right now and hold for the…

Read more »

Dividend Stocks

This 8% Dividend Stock Pays Cash Every Month

This dividend stock has a solid present, and a strong future for investors looking to gain monthly passive income while…

Read more »

edit Close-up Of A Piggybank With Eyeglasses And Calculator On Desk
Dividend Stocks

How to Earn at Least $1,560 in Passive Income in 2024 With Less Than $40K in Savings

If you have $40,000 sitting around, here is exactly how you can put it away and gain at least $1,560…

Read more »

Payday ringed on a calendar
Dividend Stocks

1 Under-$50 Dividend Stock to Buy for Monthly Passive Income

A dividend stock under $50 is the best option for those investing for monthly passive income.

Read more »

Target. Stand out from the crowd
Dividend Stocks

3 No-Brainer Stocks to Buy Right Now for Less Than $10

These three dividend stocks are no-brainer buys right now, especially since it won't take much cash at all to buy…

Read more »

A meter measures energy use.
Dividend Stocks

Forget Air Canada: Buy This Magnificent Utilities Stock Instead

A Dividend Aristocrat in the utility sector is a better buy than Air Canada.

Read more »