5 Top Canadian Dividend Stocks to Buy Right Now

The resilient payouts, stellar dividend growth history, and growing earnings base make these Canadian dividend stocks attractive investments.

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A steady investment in top dividend-paying companies over time can help create a resilient portfolio that generates significant income. While these fundamentally strong companies generate worry-free passive income, investors can also benefit from decent capital gains in the long term. 

So, for investors planning to build a solid income portfolio, here are the five top Canadian dividend stocks to buy now.

Canadian Natural Resources

Speaking of top dividend stocks Canadian Natural Resources (TSX:CNQ) appears to be an attractive investment. This oil and natural producer is famous for its resilient payout and growing dividend, rising at a solid pace. For example, the energy company has increased its dividend for 24 consecutive years. Moreover, its dividend has sported a compound annual growth rate (CAGR) of 21% during the same period. 

Besides its solid payouts, Canadian Natural Resources has delivered an impressive capital gain of about 214% in three years. The remarkable performance and payouts can be attributed to several factors, including the company’s high-value reserves, diversified and long-life assets, strategic focus on optimizing its cost structure, and a favourable low debt-to-adjusted funds flow ratio. These strengths position Canadian Natural Resources favourably to generate robust earnings, thereby sustaining its future payouts.

Fortis 

Investors could consider adding shares of the electric utility company Fortis (TSX:FTS). It operates a low-risk, defensive business that generates predictable and growing cash flows. Thanks to this, Fortis has increased its dividend for 50 consecutive years. Moreover, it plans to expand its future dividends at a CAGR of 4 to 6% through 2028. 

Fortis’s low-risk business and focus on expanding its rate base position it well to generate solid earnings and cash flows to support its future payouts. Fortis plans to grow its rate base at a CAGR of 6% through 2028. This will drive its earnings and dividends. Overall, Fortis’s resilient payouts, stellar dividend growth history, and visibility over future dividend payments make it a must-have income stock.

Enbridge 

Next up is Enbridge (TSX:ENB). This energy infrastructure company is popular for its resilient payouts and ability to grow its dividend in all market conditions. Enbridge, which transports oil and gas, has paid a dividend for 69 years. Meanwhile, it increased its dividend for 29 consecutive years at a CAGR of 10%. Its well-diversified revenue sources, benefits from contractual arrangements, and commitment to return cash to its shareholders make it a top income stock. 

Enbridge is set to gain from its solid secured projects, which will drive its future earnings. Additionally, its ongoing commitment to investing in conventional and renewable energy assets positions the company favourably to leverage increasing energy demand. Moreover, power-purchase agreements, strategic acquisitions, and inflation-adjusted earnings will support its financials and payouts. With an attractive yield of 7.6%, Enbridge presents a compelling investment opportunity.

Toronto-Dominion Bank

With a dividend payout history of 167 years, Toronto-Dominion Bank (TSX:TD) is a dependable income stock. Further, this financial services giant has increased its dividends at a CAGR of about 10% since 1998, the highest among its peers. Its diversified revenue base, growing loans, strong deposits, and solid credit quality drive its earnings and dividend payments.

The durability of its payouts, driven by its high-quality assets, robust balance sheet, and focus on improving efficiency position the bank favourably for sustaining and potentially increasing its dividend payments in the future. Additionally, its payout ratio ranges between 40 to 50%, which is conservative and sustainable for the foreseeable future.

Canadian Utilities 

Canadian Utilities (TSX:CU) has raised its dividend for 51 consecutive years, the longest among all Canadian companies. This makes Canadian Utilities one of the best stocks for generating consistent income. The company’s contracted and regulated assets account for all of its earnings, implying that its payouts are well protected. 

Canadian Utilities is expanding its regulated asset base and investing in commercially secured energy infrastructure capital growth projects. These actions will likely drive its earnings and, in turn, future payouts. 

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 Canadian Natural Resources, Enbridge, and Fortis. The Motley Fool has a disclosure policy.

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