Dividend investing is a common approach that many of the world’s most successful stock investors share and believe in. Dividends are not only a reliable source of income but also a sign of a company’s financial strength and stability. When you combine long-term dividend investing with the power of compounding, you can create massive wealth for yourself and your heirs.
In this article, I’ll talk about two of the best Canadian dividend stocks you can buy now and hold for the next 20 years without worrying about market fluctuations or temporary economic downturns.
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Cogeco Communications stock
Cogeco Communications (TSX: CCA) is the first dividend stock listed on the TSX you can buy now and hold for the next two decades. This Montréal-headquartered telecommunications giant currently has a market cap of $2.7 billion, as its stock trades at $58.41 per share after losing 10.2% of its value in the last year. These declines in its share prices, however, have made CCA stock’s annualized dividend yield go up, which currently stands at 5.8%.
The company has several decades of experience in the telecom sector and serves a large customer base of roughly 1.6 million customers through a variety of services. Steady demand growth for its quality services, including internet and phone services, has helped Cogeco Communications grow financially in recent years. This is one of the key reasons why its revenue rose 23% in five years from $2.4 billion in its fiscal year 2018 to $3 billion in fiscal 2023 (ended in August 2023). During these five years, its adjusted annual earnings also jumped from $7.04 per share to $8.75 per share, reflecting an improvement of around 24%.
As Cogeco Communications continues to focus on expanding its footprint in the fibre-to-the-home segment and consolidating regional broadband operators, its long-term business growth outlook looks solid, which should help it continue rewarding its investors with increasing dividends.
TC Energy stock
TC Energy (TSX: TRP) is also among Canada’s most attractive dividend stocks right now. This Calgary-based energy transportation firm has a wide network of natural gas and liquids pipelines across North America. Besides that, the company is also gradually expanding its presence in power and energy storage business. TRP currently has a market cap of nearly $54 billion as its stock trades at $52.01 per share without any notable change on a year-to-date basis. At this market price, it offers an impressive 7.4% annualized dividend yield.
Just like Cogeco Communications, TC Energy’s financials have also consistently grown over the last few years, reflecting its ability to continue growing even in adverse macroeconomic conditions. To give an idea about that, the energy company’s total revenue in the last five years rose 16.5%, while its adjusted earnings during the same timeframe witnessed a 17.1% increase. Moreover, its healthy cash flows allowed TRP to raise dividends by 35% in these five years.
Apart from these positive factors, TC Energy’s diversified asset base, $31 billion worth of secured capital program through 2028, and consistent focus on rewarding investors with increasing dividends make its stock really attractive to hold to buy now and hold for the long run.
