3 Top Dividend Stocks That Keep Raising Their Payouts

These three TSX stocks are ideal buy as they consistently raise their payouts, depicting their healthy financials.

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The equity markets have turned volatile over the last few weeks. Concerns over inflation, higher interest rates, and geopolitical tensions have made investors skeptical. In this uncertain outlook, investors should add quality dividend stocks to strengthen their portfolios and deliver a stable passive income. Meanwhile, the following three TSX stocks have consistently raised their dividends, indicating their solid underlying businesses and stable cash flows, thus making them excellent buys.

Enbridge

Enbridge (TSX:ENB) is an ideal dividend stock to have in your portfolio due to its stable cash flows and consistent dividend growth. The midstream energy company has no material exposure to commodity prices and earns around 98% of its earnings from cost-of-service or take-or-pay contracted assets. Around 80% of its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) is inflation-indexed. So, its cash flows are stable and predictable, thus allowing it to raise its dividend at an annualized rate of 10% over the last 29 years. With a quarterly dividend of $0.915/share, its forward yield is 7.32%.

Further, Enbridge is expanding its natural gas utility business through acquisitions and is continuing its $24 billion secured capital program to grow its midstream and renewable energy business. Its financial position also looks healthy, with its debt-to-EBITDA multiple at 4.1. So, I believe Enbridge is well equipped to continue rewarding its shareholders through its dividend growth, thus making it an ideal buy.

goeasy

Second on my list is goeasy (TSX:GSY), which has raised its dividend at an annualized rate of 30% since 2014. The company has been growing its top and bottom lines in double digits for the last 20 years, allowing it to raise its dividends consistently. Despite solid growth, the company’s market share in the $218 billion Canadian subprime market is just 2%. So, it has a substantial scope for expansion.

Meanwhile, goeasy is expanding its product offering, adding new distribution channels, and strengthening its digital infrastructure, which could drive its growth in the coming quarters. Also, it has enhanced underwriting and income verification processes, tightened its credit tolerance by raising required credit criteria, and adopted next-gen credit models, which could lower default rates. Given these growth initiatives and rising credit demand, I expect the uptrend in goeasy’s financials to continue, thus allowing it to maintain its dividend growth.

Canadian Natural Resources

Another top Canadian stock that has consistently raised its dividends is Canadian Natural Resources (TSX:CNQ), which has raised its dividends for the previous 24 years at an annualized rate of 21%. Given its long-life asset base and diversified cash flows, the company generates stable and predictable cash flows, allowing it to raise dividends consistently. With a quarterly dividend of $1.05/share, its forward yield stands at 4%.

Despite the recent cooldown, oil prices continue to trade higher year to date. Analysts predict oil prices will remain elevated in the near to medium term, benefiting oil-producing companies like CNQ. Meanwhile, the company has planned to invest around $5.4 billion this year, strengthening its asset base. Amid these investments, its production could rise, with the midpoint of the management’s 2024 guidance representing a 1.7% increase. So, higher prices and increased production could boost its financials in the coming quarters.

Further, CNQ has also strengthened its financial position by lowering its net debt from $21.5 billion in 2020 to $9.9 billion at the end of the first quarter of 2024. So, I believe CNQ is well-positioned to continue its dividend growth, making it an excellent buy.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned. The Motley Fool recommends Canadian Natural Resources and Enbridge. The Motley Fool has a disclosure policy.

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