The TSX has several high-quality dividend-paying companies that pay and increase their payouts regardless of the market conditions. This attribute makes these companies a reliable investment for passive-income seekers.
However, I’ll focus here on fundamentally strong companies with high dividend-growth rates. With this backdrop, let’s look at five such Canadian stocks with a high dividend growth history.
goeasy
goeasy (TSX: GSY) consistently generates stellar earnings. Its growing earnings base enables this subprime lender to increase its dividend rapidly. The company was included in the S&P/TSX Canadian Dividend Aristocrats Index in February 2020 as it increased its dividend at a compound annual growth rate (CAGR) of 42% over the prior five years. Since 2020, goeasy’s dividend increased over 113% to $0.96 in 2023.
Notably, on February 14, 2024, goeasy increased the quarterly dividend to $1.17 per share, up 21.9% from $0.96. This marked 10 consecutive years of dividend growth.
Its ability to grow its consumer loans portfolio, large addressable market, diversified funding sources, and geographical expansion will likely boost goeasy’s earnings. Also, steady credit performance and improving operating efficiency will likely support its bottom-line growth and dividend payments.
Canadian Natural Resources
Like goeasy, Canadian Natural Resources (TSX: CNQ) is famous for its high dividend growth rate. This oil and gas company has a track record of 24 consecutive years of dividend increases. Its dividend increased by 21% annually during the same period.
In 2023, Canadian Natural Resources announced d two separate increases to its quarterly dividend, for a combined increase of 18% to $1 per share. Further, in February of 2024, the energy giant announced an additional 5% increase to the quarterly dividend to $1.05 per share, or $4.20 annually.
Canadian Natural Resources’s long-life assets, high-value reserves, strong balance sheet, and low maintenance capital requirements position it well to generate solid earnings. Moreover, the company’s bottom line will benefit from its tight control over costs, which will drive future payouts.
Cogeco Communications
Investors could consider Cogeco Communications (TSX: CCA) stock, which has an impressive dividend payment history. This telecom and internet services provider has increased its dividend at a CAGR of over 10% in the past decade. In November 2023, Cogeco raised its dividend by 10.1%. Moreover, it offers a high yield of over 6%.
The company’s resilient business model adds stability and supports its revenue and cash flows. Moreover, its growing scale and operational efficiency augur well for future earnings and cash flows. Cogeco stands to gain from its focus on expanding its fibre-to-the-home offerings and the acquisition of complementary broadband businesses. Additionally, its strategy to introduce and develop mobile services in the U.S. and Canada will likely broaden its market reach, bolster its earnings, and sustain its dividend payouts.
Telus
Investors could consider Telus (TSX: T) stock as well. The company consistently increases its dividend through its multi-year dividend-growth program. Since 2004, Telus has distributed around $20 billion to its shareholders via dividends. Moreover, the company has raised its dividend for 25 consecutive years.
Its ability to grow its customer base and improve operating costs helps it boost its earnings and cash flows, which will support higher dividend payments. Further, Telus will likely benefit from the expansion of its 5G services. It expects to grow its dividend by 7-10% through 2025 and offers a yield of over 6%.
Brookfield Renewable Partners
Brookfield Renewable Partners (TSX: BEP.UN) is a compelling stock in the renewable energy sector known for raising its dividend at a higher rate. Investors should note that Brookfield Renewable increased its dividend at a CAGR of 6% between 2012 and 2023. Further, the company expects to grow its dividend by 5-9% annually in the upcoming years. Brookfield also offers a compelling yield of about 6%.
Its highly contracted portfolio enables it to generate solid financials and offer higher dividend payments. Further, its highly diversified assets base, growing capacity, and solid developmental pipeline position it well to capitalize on clean energy demand and return higher cash to its shareholders.
