The TSX has several high-quality dividend stocks for investors seeking consistent income. However, here, I’ll restrict myself to shares backed by fundamentally strong businesses, impressive dividend payments and growth history, a growing earnings base, and commitment to returning higher cash to their shareholders. These attributes make them no-brainer dividend stocks.
So, if you plan to invest $1,000, here are three no-brainer dividend stocks to invest in.
Enbridge
Enbridge (TSX:ENB) is a top Canadian stock offering a worry-free dividend. This oil and gas transportation company has an impressive dividend distribution history. For instance, Enbridge paid dividends for 69 consecutive years and raised it uninterruptedly for nearly three decades. Moreover, its targeted dividend payout ratio of 60 to 70% of distributable cash flow (DCF) is sustainable in the long term.
Enbridge’s stellar dividend history reflects the durability of its payouts and management’s commitment to enhancing shareholders’ value. Notably, its resilient business model, highly diversified revenue streams, and growing earnings base support DCF growth that covers its dividend payouts.
The energy infrastructure company’s power-purchase agreements, long-term contracts, and high asset utilization rate will likely drive its future earnings and DCF. Moreover, its investments in conventional and renewable energy assets will position it well to capitalize on energy demand. Thanks to these catalysts, Enbridge’s earnings and DCF per share are forecasted to increase by 5% in the long term. This will enable the company to grow its dividend at a mid-single-digit rate during the same period. Further, it offers a high and well-protected yield of 7.36% near current levels.
Bank of Montreal
Investors could consider investing in Bank of Montreal (TSX:BMO) stock for the resilience of its earnings and ability to consistently pay dividends for nearly two centuries. To be precise, this leading Canadian bank has paid dividends for over 195 years, the longest by any Canadian company. Moreover, this financial services company increased its dividend at a compound annual growth rate (CAGR) of 5% in the past 15 years.
The bank’s stellar dividend payouts are supported by its ability to deliver profitable growth. Its diversified revenue sources, high-quality loans, and solid deposit base drive its top line. Further, steady credit performance and operating efficiency cushion its earnings and drive its payouts.
Bank of Montreal expects its earnings to increase at a CAGR of 7 to 10% in the medium term, enabling it to grow its dividend at least at a mid-single-digit rate. Based on its closing price of $124.79 on May 3, Bank of Montreal stock offers a yield of 4.84%.
Fortis
Fortis (TSX:FTS) is another no-brainer stock for generating worry-free dividend income. This utility company has consistently enhanced its shareholders’ value through higher dividend payments. For example, it boasts a 50-year dividend growth history. Moreover, it offers a well-protected yield of 4.32%, near the current price.
Fortis operates a low-risk, regulated electric utility business, which helps it generate predictable cash flows and offer higher dividend distributions. Meanwhile, its diversified regulated utility asset base accounts for all its earnings, implying its payouts are well covered.
The utility company focuses on growing its rate base, enabling it to enhance shareholders’ returns through higher dividend payments. Fortis plans to expand its rate base at a 6.3% CAGR through 2028. The company also anticipates raising its dividend at an annualized rate of 4 to 6% during the same period. The stability of its payouts and visibility over future payments make Fortis a no-brainer dividend stock.
