The TSX has several top-quality dividend stocks that have paid and increased dividends for decades. Further, these fundamentally strong companies have a growing earnings base, positioning them well to enhance their shareholders’ returns through increased dividend payments. These qualities make them no-brainer stocks for worry-free passive income. What stands out is that you do not require a lot of money to start investing in these dividend gems.
With this background, let’s look at three no-brainer Canadian stocks to buy right now for less than $200.
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Enbridge
With a track record of stellar dividend payments, a resilient business model, and visibility over its future earnings growth, Enbridge (TSX: ENB) is a no-brainer dividend stock to buy now. The company operates an energy infrastructure business and has paid dividends for 69 years. Notably, this Dividend Aristocrat has increased quarterly distributions for 29 consecutive years.
Enbridge’s well-diversified income streams, high asset utilization rate, long-term contractual arrangements, and agreements to reduce the impact of commodity price and volume volatility drive its distributable cash flows (DCF) and dividend payments. Moreover, its multi-billion-dollar growth projects, strategic acquisitions, and investments in conventional and renewable energy assets provide new opportunities for growth and support its payouts.
Enbridge has increased its dividend at a compound annual growth rate (CAGR) of 10% in the past decades. Looking ahead, the company expects its DCF per share and earnings per share (EPS) to increase at a CAGR of approximately 5% in the long term. This will enable goeasy to grow its future payouts by a mid-single-digit rate. Besides reliable payouts, Enbridge offers a compelling yield of 7.8%, which is positive and supports my bullish outlook.
Canadian Utilities
Sporting a dividend growth history of 51 years, the longest by any Canadian company, Canadian Utilities (TSX: CU) is a no-brainer stock for dividend income. This utility company benefits from its regulated and contracted assets that generate high-quality earnings regardless of market conditions. Consequently, it enables Canadian Utilities to return higher dividends to its shareholders.
The utility giant continues investing billions of dollars to expand its rate base, supporting future earnings and payouts. It also focuses on commercially secured energy infrastructure capital growth projects, which augurs well for long-term growth and adds stability to its business.
With its growing regulated and contracted asset base, Canadian Utilities is well-positioned to distribute higher dividends in the upcoming years. Further, it offers an attractive yield of 5.9%, based on the closing price of $30.17 on April 12.
Fortis
Fortis (TSX: FTS) is the third no-brainer stock on the TSX investors could consider investing in for dependable passive income. The company operates a regulated electric utility business and generates predictable cash flows that enable it to consistently increase its dividends and enhance its shareholders’ returns.
Thanks to its defensive business model and growing earnings base, Fortis has increased its dividend for 50 consecutive years.
Looking ahead, the company expects its rate base to grow at a CAGR of 6.3% through 2028. This will expand its earnings and drive its distributions. Notably, Fortis expects to grow its dividend at a CAGR of 4 to 6% during the same period. Moreover, it offers a well-protected yield of 4.6%.
