2 Top Dividend Stocks That Keep Raising Their Payouts

In addition to their solid dividend growth track record, these top dividend stocks also offer strong growth potential for the future.

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Dividend investing could prove to be an effective investment strategy for income investors, especially in times of economic uncertainty and market volatility. Many Canadian dividend stocks not only offer stable and growing payouts but also could benefit from the recovery in demand and a gradual economic expansion in the coming years.

Here are two top dividend stocks on the Toronto Stock Exchange that have consistently increased their dividends for well over a decade and could continue to do so in the future.

BCE stock

BCE (TSX:BCE) is the first top dividend stock on my list, as it has been rewarding its investors with regular dividends for decades. In addition, the Verdun-headquartered telecom giant has raised its dividend payouts for 16 consecutive years. BCE currently has a market cap of $40.7 billion as its stock trades at $44.65 per share after sliding by 14.4% so far in 2024. At this market price, it offers an eye-popping 8.9% annualized dividend yield.

In the first quarter of this year, BCE’s total revenue fell slightly by 0.7% YoY (year over year) to $6 billion. Despite an intensely competitive market and macroeconomic weakness, the company’s blended average revenue per user remained steady, highlighting its ability to maintain customer value. Moreover, it achieved its highest first-quarter mobile phone postpaid net activations in the wireless segment since 2018, climbing by 4.5% YoY to 45,247.

Interestingly, the Canadian telecom company’s presence in a highly regulated market provides it with a competitive advantage against smaller rivals. As the Bank of Canada recently announced its decision to slash interest rates for the first time in over four years, interest-sensitive sectors like telecom are likely to benefit from low borrowing costs. This factor, along with expected improvements in consumer demand, could help BCE boost its financial performance in the coming quarters, which could also drive its share prices higher.

Enbridge stock

The list of top Canadian dividend stocks seems incomplete without mentioning Enbridge (TSX:ENB). This Canadian energy infrastructure company is a Dividend Aristocrat as it has increased its dividends for 29 consecutive years and has paid regular dividends to its loyal shareholders for slightly less than seven decades. ENB stock currently has a market cap of $101 billion as its stock trades at $47.50 per share after rising 9% over the last eight months. It offers a very attractive 7.7% annualized dividend yield at the current market price.

Enbridge’s large network of pipelines that transport oil and gas across North America helps it generate reliable and largely predictable cash flows, making it an ideal dividend stock to buy and hold for the long term.

In the first quarter of 2024, the company’s distributable cash flow rose 9% YoY to $3.5 billion. Similarly, Enbridge’s adjusted earnings inched up by 8.2% YoY during the quarter to $0.92 per share, beating Street analysts’ expectations of $0.81 per share by a wide margin.

In the last few years, the energy infrastructure firm has increased its presence in renewable energy, natural gas distribution, and crude oil export segments, which are likely to add to its earnings diversification in the long run. Considering that, it could be a great long-term investment for dividend lovers.

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. The Motley Fool has a disclosure policy. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

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