Quality dividend stocks are less susceptible to market volatility, given their solid underlying businesses, stable cash flows, and regular payouts. Along with providing stability to your portfolios, these companies will deliver a stable passive income. On this backdrop, let’s look at three safe TSX dividend stocks you can buy and hold for the next 10 years.
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Fortis
Fortis (TSX:FTS) is a regulated utility company, with around 93% of its assets in the low-risk transmission and distribution business. With 99% of its assets regulated, its financials are less susceptible to market volatility, thus delivering stable and predictable financials. Over the last 20 years, it has delivered an average total shareholders’ returns of 10.1%, outperforming the broader equity markets. Also, the company is a Dividend King, which has raised its dividends uninterruptedly for 50 years. It currently offers a healthy forward yield of 4.24%.
Fortis plans to invest around $25 billion, growing its rate base at an annualized rate of 6.3% from $37.03 billion in 2023 to $49.4 billion in 2028. Along with these growth initiatives, its solid operating performances, including lower outages and improving operating costs per customer, could boost its financials in the coming years. Given these growth initiatives, the company’s management is confident of raising dividends at an annualized rate of 4-6% through 2028. So, I believe Fortis would be a safe stock to have in your portfolio.
Enbridge
Enbridge (TSX: ENB) is a diversified energy company that transports oil and natural gas across the United States and Canada through a pipeline network. It is also strengthening its presence in natural gas utility and renewable energy businesses. Given its diversified revenue streams and contracted and inflaton-indexed asset base, the company generates stable and predictable cash flows, allowing it to pay dividends for 69 previous years. It has raised dividends for 29 years and offers an impressive forward dividend yield of 7.30%.
Further, Enbridge is continuing with its $25 billion secured capital program, which could drive 3% of annual growth through 2028. Its asset optimization, cost savings, and productivity improvements could contribute to a 1-2% yearly increase in the coming years. Along with these organic growth initiatives, the company has acquired two natural gas utility assets in the United States and is working on acquiring the third one. Its financial position also looks healthy, with a liquidity of $12.9 billion and a healthy debt-to-EBITDA (earnings before interest, tax, depreciation, and amortization) multiple of 4.7. Considering all these factors, I believe Enbridge would be an excellent buy for income-seeking investors.
Canadian Natural Resources
My final pick is Canadian Natural Resources (TSX:CNQ), an oil and natural gas-producing company with assets in Western Canada, the North Sea, and Offshore Africa. Its low-risk, high-value reserves, diversified asset base, and efficient operations generate healthy cash flows, allowing it to raise its dividends at an annualized rate of 21% for the last 24 years.
Despite the growing adoption of renewable energy sources, the International Energy Agency projects oil demand in 2030 to be 3.2 million barrels per day higher than in 2023 unless significant policy changes are made. Rising demand should support oil prices, benefiting CNQ. The company continues to make capital investments, strengthening its asset base. This year, it plans to invest around $5.4 billion, including drilling 298 conventional exploration and production wells, which could boost its production.
With its net debt below its target of $10 billion, CNQ expects to return 100% of its free cash flows to shareholders this year. Given its healthy growth prospects and solid cash flows, I believe CNQ’s future dividend payouts will be safe, making it an ideal long-term buy.
