How to Earn $1,332.50 a Year With Dividend Aristocrats

Income-focused investors can earn their desired passive income streams through dividend aristocrats.

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Dividend investing is one way to meet financial needs or create extra income streams in addition to regular income. However, seasoned income-focused investors will tell you that not all dividend stocks are equal. If you have a specific amount or target, only settle for dividend aristocrats.

Stocks like Canadian Utilities Limited (TSX:CU) and Canadian Western Bank (TSX:CWB) belong to a special category of dividend payers. These companies have raised dividends for five consecutive years.

Given their average yield of 5.33%, accumulating $12,500 worth of each stock will generate $1,332.50 yearly. Since the payout frequency is quarterly, the combined investment transforms into $333.13 in quarterly passive income.

Higher level

Canadian Utilities is on a higher level. If dividend aristocrats were a pride of lions, this utility stock would be the king and TSX’s first dividend king. The $6.3 billion diversified energy infrastructure company has raised dividends for 52 consecutive years.

The lengthy dividend growth streak tells a lot about Canadian Utilities. Its business is less volatile, notwithstanding countless recessions, periods of economic downturns, financial crises, and a global pandemic between 1972 and the present. Moreover, the unconstrained dividend growth indicates a stable business model, particularly for regulated utilities.

Canadian Utilities is part of the ATCO Group of Companies. Its four regulated utilities (Electricity Transmission, Electricity Distribution, Natural Gas Transmission, and Natural Gas Distribution) assets form a solid foundation. Collectively, they ensure long-term resiliency despite macroeconomic headwinds.

According to management, the planned $4.1 billion to $4.8 billion three-year capital investment plan in Regulated Utilities should contribute significant earnings and cash flows while creating long-term shareholder value.

The projected rate base growth from 2024 to 2026 is 3% to 4% and around 4% to 5% over a more extended period. By year-end 2026, the consolidated mid-year base would be $16.7 billion up to $17.4 billion.

Because of the ever-changing trends and societal changes, looking for diversification and expansion opportunities is also an ongoing concern. However, large-scale world events can create challenges or threats to the business.

In 2023, adjusted earnings decreased 9% year over year to $596 million. Still, Canadian Utilities aims to grow dividends due to sustainable earnings growth from the regulated and long-term contracted investments. If you invest today, the share price is $30.77, while the dividend yield is 5.89%.

Dividend contender

The smaller Canadian Western Bank is a worthy dividend contender to Canada’s Big Six banks and a reliable income stock. The $2.8 billion full-service bank has raised dividends for 13 straight years. Furthermore, the annual increase in the last 10 years is 6.02%. At $30.77 per share, current investors partake in the 4.77% dividend.

In Q1 fiscal 2024, common shareholders’ net income fell 6.89% to $87.9 million versus Q1 fiscal 2023, while provision for credit losses climbed 110.6% year over year to $17.9 million. Its President and CEO, Chris Fowler, said it was a focused performance for the bank during the quarter owing to the positive operating leverage.

Because of a strong balance sheet and prudent risk management, Fowler adds that CWB’s 2024 financial outlook is unchanged. The bank is well-positioned to create value for investors.


Dividend growers Canadian Utilities and Canada Western Bank are investor-friendly. Although stock prices could fluctuate from time to time, quarterly payouts should be uninterrupted.

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 Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends Canadian Western Bank. The Motley Fool has a disclosure policy.

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