3 Dividend Stocks You Can Safely Hold for Decades

These three dividend stocks are enticing buys for long-term investors, given their solid underlying businesses and healthy growth. prospects.

| More on:
Path to retirement

Image source: Getty Images

Investing in dividend stocks is an astute strategy, as investors can benefit from capital appreciation and earn a stable passive income. Also, dividend stocks have historically outperformed the broader equity markets with lower volatility. Having seen the advantages of dividend stocks, let’s look at my three top picks you can buy and hold for decades.

Enbridge

Enbridge (TSX:ENB) is one of the top dividend stocks to have in your portfolio due to its consistency in paying and raising dividends. The Calgary-based company transports oil and natural gas across North America through a pipeline network. It has signed long-term contracts with its clients. So, commodity price fluctuations will not substantially impact its financials, thus delivering stable and predictable cash flows.

The company has uninterruptedly paid dividends for 69 years and raised them for 29 consecutive years at a CAGR (compound annual growth rate) of 10%. ENB currently pays a quarterly dividend of $0.915/share and has a forward yield of 7.52%.

Further, Enbridge recently acquired East Ohio Gas Company and is working on acquiring two other natural gas utility assets in the United States, making it the largest natural gas utility company in North America. It is also expanding its midstream and renewable energy assets, and has plans to put around $8 billion of assets into service by the end of next year. Given Enbridge’s healthy growth prospects, increasing contribution from low-risk, utility assets, and healthy financial position, its future dividend payouts look safe. So, I believe Enbridge would be a worthy stock to buy and hold for decades.

Fortis

Another dividend stock that I am bullish on is Fortis (TSX:FTS), which has been raising its dividend for the last 50 years. The company operates 10 regulated utility assets across the United States, Canada, and the Caribbean, serving 3.5 million customers. With around 99% of its assets being regulated utility assets, the company’s financials are less susceptible to broader market conditions. Supported by its stable cash flows, the utility company has raised its dividends for 50 consecutive years. Meanwhile, its forward yield stands at a healthy 4.41%.

Further, the utility company is looking to expand its asset base and has planned to invest around $25 billion over the next five years. Amid these investments, its rate base could grow at a CAGR of 6.3% to $49.4 billion by 2028. The expanding rate base could boost its cash flows, thus allowing Fortis to continue its dividend growth. Meanwhile, the company’s management is confident of raising its dividend by 4 to 6% annually until 2028. So, I am bullish on Fortis.

Telus

Despite the weakness in the telecom sector, I have picked Telus (TSX:T) as my final pick. The CTRC (Canadian Radio-television and Telecommunications Commission) has mandated large telcos to share their fibre-to-the-home (FTTH) networks with reselling companies to maintain healthy competition. However, the announcement would discourage telcos from investing in building quality network infrastructure. Besides, rising interest rates have also weighed on the sector, given its capital-intensive business. Amid the weakness, Telus has lost around 25% of its stock value compared to its 52-week high.

The steep correction offers an opportune entry point for long-term investors. With inflation showing signs of easing, the central banks could initiate rate cuts. Besides, the demand for telecom services could only rise in this digitally connected world. Further, Telus’s other growth segments, such as Telus Health, TELUS International, and TELUS Agriculture & Consumer Goods, could continue to boost its financials in the coming quarters. Meanwhile, amid the recent correction, its dividend yield has increased to 6.95%, making it an excellent buy for long-term investors.

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 Rajiv Nanjapla has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge, Fortis, and TELUS. The Motley Fool has a disclosure policy.

More on Dividend Stocks

A close up image of Canadian $20 Dollar bills
Dividend Stocks

This High-Yield Dividend Stock Is a Monster Passive-Income Machine 

This top TSX dividend-growth stock offers a 7.4% yield.

Read more »

Hourglass projecting a dollar sign as shadow
Dividend Stocks

For a Shot at $5,000/Year in Passive Income, Buy 6,850 Shares of This TSX Stock

Whitecap Resources is a monthly dividend stock that offers you a tasty dividend yield while trading at a cheap valuation.

Read more »

edit Balloon shaped as a heart
Dividend Stocks

Love Value Stocks? 2 That Are Screaming Buys in May 2024

Patience can pay off by investing in these two value stocks with nice dividends and the potential to turn around.

Read more »

Senior Couple Walking With Pet Bulldog In Countryside
Dividend Stocks

2 Everlasting Canadian Stocks for Your RRSP

The Canadian National Railway (TSX:CNR) stock is worth owning for the long haul.

Read more »

Business success with growing, rising charts and businessman in background
Dividend Stocks

3 Stocks Set for Dividend Increases This Year

Here are three TSX stocks that are set to increase their dividends later this year.

Read more »

Dice engraved with the words buy and sell
Dividend Stocks

EQB Inc Stock: Buy, Sell, or Hold

EQB Inc (TSX:EQB) is Canada's fastest-growing bank.

Read more »

pipe metal texture inside
Dividend Stocks

Enbridge Stock: Buy, Sell, or Hold Today?

Enbridge is up 7% in the past six months. Are more gains on the way?

Read more »

money cash dividends
Dividend Stocks

The 2 Stocks Every Dividend Investor Should Own for Reliable Cash

Dividend stocks offering consistent and reliable returns can be a crucial asset in any portfolio, especially for income-producing dividend portfolios.

Read more »