These 5 Stocks Have Unstoppable Dividend Growth

These five stocks can form a diversified stock portfolio of dividend aristocrats from the TSX.

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Stable companies paying dividends attain dividend aristocrat status if they complete five consecutive years of dividend increases. The TSX is home to around 50 of these dividend growers. You can pick from various sectors to form a stock portfolio with only dividend aristocrats.

Utilities

Emera (TSX:EMA) is a defensive holding for its low-risk profile. The $13.1 billion diverse energy and services company focuses primarily on regulated electricity generation and transmission. Besides the 17-year dividend growth streak, it has a long growth runway. At $45.81 per share, you can partake in the 6.3% dividend.

On May 13, 2024, management provided annual dividend growth guidance of 4% to 5% through 2026, which aligns with annual rate base growth of 7% to 8% within the same period. The goal is achievable under its capital growth plan worth $5.4 billion. In Q1 2024, operating revenues and adjusted net income rose 2.3% and 23.4% respectively to $2 billion and $216 million versus Q1 2023.

Technology

Enghouse Systems (TSX:ENGH) is a rare gem. You seldom see a tech stock pay dividends, much more a dividend aristocrat. At $30.46 per share, the dividend offer is 3.4%. ENGH has raised dividends for 17 consecutive years. The $1.7 billion company provides mission-critical, vertically focused enterprise software solutions.

ENGH caters to contact centres and services markets such as public safety, telecommunications networks, transit, video communications, and virtual healthcare. The business is thriving, as evidenced by the results for the first half of fiscal 2024. In the six months ending April 30, 2024, revenue and net income climbed 12% and 28.7% year over year to $246.3 million and $38.1 million, respectively.    

Communications services

Cogeco Communications (TSX:CCA) operates in a highly competitive environment, including the U.S. market. Still, its 19-year dividend growth streak is an incredible feat. If you invest today ($52.55 per share), the dividend offer is a lucrative 6.5%.

The $2.2 billion telecommunications company has reorganized and announced a new operating model. By combining the commercial, operational, and technical functions of the Canadian and U.S. telecommunications businesses, Cogeco can create strong cross-border centres of expertise in key strategic areas and power future growth.

Financial services

First National Financial Corporation (TSX:FN) boasts an 11-year dividend growth streak and pays a hefty 6.8% dividend (monthly payout). Market analysts’ 12-month average price target is $40.67, a nearly 13% upside from the current share price of $36.01. This $2.2 billion company underwrites and services prime residential and commercial mortgages.

In Q1 2024, assets under management (AUM) increased 9% to a record $145.1 million compared to Q1 2023, while net income jumped 39.8% year over year to $49.9 million. “On the strength of mortgage servicing and our securitization strategy, we generated solid profitability,” said Jason Ellis, President and CEO of First National.

Utilities – renewables

Brookfield Renewable Partners (TSX:BEP.UN) is a dividend aristocrat owing to 13 straight annual dividend hikes. At $34.59 per share, current investors are up 2.3% year to date and enjoy a 5.6% dividend. The $9.9 billion company owns and operates high-quality renewable power assets.

Brookfield Asset Management (TSX:BAM), one of the world’s largest alternative investment management companies, has a 60% ownership stake in Brookfield Renewable Partners.

Unstoppable dividend growth

The five stocks in focus have unstoppable dividend growth streaks. Your choice would depend on sector preference and risk appetite.

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 Christopher Liew has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Enghouse Systems. The Motley Fool recommends Brookfield Asset Management, Brookfield Renewable Partners, Cogeco Communications, and Emera. The Motley Fool has a disclosure policy.

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