Retirees: 3 TSX Stocks That Have Raised Dividends Annually for More Than 20 Years

Decades of dividend growth have driven steady increases in passive income.

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Canadian pensioners are searching for reliable TSX dividend-growth stocks to add to their self-directed Tax-Free Savings Account (TFSA) portfolio focused on generating steady passive income. The drop in the share prices of several leading dividend payers is giving investors a chance to get attractive yields.

TC Energy

TC Energy (TSX:TRP) trades near $52.50 at the time of writing. The stock is up from $44 in the fall last year but still trades well below the 2022 peak around $74.

TC Energy uses debt to fund part of its capital program. The firm should benefit from falling interest rates in the next year as the Bank of Canada extends rate cuts. South of the border, the U.S. Federal Reserve is expected to start cutting rates later this year or in early 2025.

TC Energy raised cash through asset sales to stabilize the balance sheet in the past year and should be in good shape to make ongoing progress on the growth initiatives. As new assets go into service, there should be adequate cash flow expansion to support dividend hikes in the 3-5% range. TC Energy has increased the dividend in each of the past 24 years. Investors who buy at the current level can get a 7.3% dividend yield.

Enbridge

Enbridge (TSX:ENB) is another energy infrastructure player with a great track record of dividend growth. The oil and natural gas transmission giant raised its dividend in each of the past 29 years.

Enbridge has broadened its investments in recent years to include oil exports, natural gas liquids (NGL) exports and renewable energy assets. The company is also betting big on natural gas demand in the United States with its US$14 billion acquisition of three natural gas utilities.

Enbridge’s $25 billion capital program should support revenue growth. Over the medium term, annual dividend increases should be in the 3-5% range, in line with the anticipated expansion of distributable cash flow.

Enbridge trades near $48 per share at the time of writing compared to $59 two years ago. Investors can now get a 7.7% yield on ENB stock.

Fortis

Fortis (TSX:FTS) has increased its dividend in each of the past 50 years. The current yield is only 4.4%, but the anticipated annual dividend growth of 4-6% will steadily boost the return on the initial investment.

Fortis also has a $25 billion capital program on the go that will boost the rate base from $37 billion in 2023 to nearly $50 billion by 2028. Additional projects under consideration could get added to the capital pipeline to extend the dividend-growth outlook. Fortis has a solid track record of acquisitions, although the company has not completed a major takeover since its US$11.3 billion purchase of ITC Holdings in 2016. Declining interest rates could lead to new deals in the coming years.

Fortis trades near $53 right now compared to $65 in 2022, so there is decent upside potential for FTS stock.

The bottom line on top TSX dividend stocks for passive income

TC Energy, Enbridge, and Fortis are good examples of top TSX stocks with great track records of dividend growth. If you have some cash to put to work in a TFSA focused on passive income, these stocks deserve to be on your radar.

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.

The Motley Fool recommends Enbridge and Fortis. The Motley Fool has a disclosure policy. Fool contributor Andrew Walker owns shares of Enbridge.

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