Investors looking for dividend stocks that could pay them for life could consider shares of companies with fundamentally strong businesses with capabilities to grow earnings in all market conditions. Additionally, one should look for corporations with a solid track record of dividend distributions across economic cycles and sustainable payout ratios.
With this backdrop, let’s look at three Canadian stocks with a proven history of consistently paying and increasing dividends regardless of the market conditions. Adding these dividend stocks to your portfolio can help generate worry-free income for life.
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Enbridge
Enbridge (TSX:ENB) is one of the most dependable stocks for earning steady dividend income. This Canadian company, which transports oil and gas, has an attractive history of paying and consistently increasing its dividends for decades. For instance, this energy infrastructure giant has paid dividends for about 69 years and has raised it for nearly three decades (29 years, to be precise).
What stands out is that Enbridge even paid and raised its distributions during the pandemic when most energy companies either paused their payouts or announced a cut. While investors can rely on Enbridge’s payouts, it offers a compelling yield of 7.64% (based on the closing price of $47.90 on April 9), which supports my bull case.
Enbridge’s resilient business model, investments in conventional and renewable energy assets, contractual arrangements, and higher asset utilization position it well to capitalize on energy demand and consistently grow its earnings and dividend distributions. Further, multi-billion secured projects and strategic acquisitions will likely generate higher distributable cash flows, driving its payouts in the future.
Canadian Utilities
Investors seeking unstoppable dividend stocks could consider Canadian Utilities (TSX:CU) for its commitment to return cash to its shareholders. It has maintained a solid track record of payouts and boasts the longest history of uninterrupted dividend growth among all publicly traded Canadian companies.
This utility company has increased its dividends for an impressive 51 consecutive years, making it a top choice for investors seeking reliable passive income. The company’s remarkable dividend-growth history stems from its ability to generate strong earnings and predictable cash flows backed by its regulated and contracted assets.
In the future, the firm’s ongoing investments in regulated utility assets are likely to expand its rate base and, in turn, earnings. Additionally, its focus on commercially secured energy infrastructure capital growth projects will likely support its growth, enabling Canadian Utilities to distribute higher dividends.
Currently, the company offers a lucrative yield of over 5.8% based on the closing price of $30.86 on April 9.
Fortis
Fortis (TSX:FTS) is known for its stellar dividend payments and growth history. This electric utility company has increased its dividend for 50 consecutive years, making it a reliable bet for investors seeking worry-free income.
Fortis operates a regulated utility business that consistently generates predictable cash flows, enabling it to enhance its shareholders’ returns through higher dividend distributions. Further, Fortis’s defensive business model makes it relatively less volatile, thus adding stability to your portfolio.
The company focuses on expanding its rate base, which will likely drive earnings and support future distributions. Fortis plans to grow its rate base by about 6.3% annually through 2028 and increase its dividend by 4-6% per annum during the same period. Fortis offers a healthy dividend yield of 4.4%.
