The 3 Best Canadian Dividend Stocks to Buy for Dividend Growth

These three Canadian dividend stocks look well-positioned to see continued upside over the long term.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Toronto Stock Exchange has several high-quality dividend stocks that offer higher yields comparable to those of bonds, but with higher growth profiles over the long term. These are the sort of dividend proxies I think are worth considering right now. That’s doubly true now that we’re entering a period of declining interest rates.

For those looking for a short list of dividend stocks to consider, here are three Canadian companies that may be worth some additional research and attention right now.

Fortis

Fortis (TSX:FTS) operates and owns 10 utility transmission and distribution assets in Canada and the United States. The company also offers capital programs and growth plans to meet energy requirements. Fortis continues to collaborate with the government, industry associations, and other stakeholders to establish environmental standards appropriate for the business and utilities. 

Created with Highcharts 11.4.3Fortis PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Over the past five decades, Fortis has provided consecutive increases in its dividend payout, with more than 20 years of compelling and stable returns. Currently, Fortis serves more than 3 million customers with US$68 billion in assets. Notably, the company also aims to expand and diversify its portfolio while delivering reliable, safe, and cost-effective energy service to its customers. 

Moreover, the company’s five-year capital plan is expected to increase the midyear rate base to US$49.4 billion by 2028 from US$37 billion in 2023, accounting for a five-year CAGR of 6.3%. Hence, Fortis appears well-positioned to allow income investors to grow their capital over this period.

Alimentation Couche-Tard

Alimentation Couche-Tard (TSX:ATD) is a retail company operating a convenience store network in Europe and North America. The company primarily offers food, non-food items, and transportation fuels. In addition, Couche-Tard also offers car wash services in the region. 

Created with Highcharts 11.4.3Alimentation Couche-Tard PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Recently, Alimentation Couche-Tard Inc. announced its financial reports for the fourth quarter of fiscal year 2024, highlighting net earnings attributable to shareholders of US$453 million. In addition, the report also showcases the company’s reported net earnings of US$2.8 billion and comprehensive income of $2.6 billion. 

As a business, Alimentation Couche-Tard Inc. commits to sustainability and extends it to the financing of its global operations. In addition, the company’s financial strength is expected to hold up its ability to enhance and increase its market presence across the regions. Hence, the company aims for a CAGR of 16% over the next several years, enabling investors to grow their capital with time.

Suncor Energy

Suncor Energy (TSX:SU) is a production and exploration company in Canada focusing on developing the Athabasca oil sands. The company carries out the development and upgradation of oil sands, onshore and offshore oil and gas production, and marketing of petrochemical products. 

Created with Highcharts 11.4.3Suncor Energy PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Suncor Energy reported its financial reports for the first quarter of 2024, highlighting US$1.6 billion in net earnings. Moreover, the adjusted operating earnings for the period were US$1.8 billion. The company’s adjusted funds from operation for the period came in at US$3.2 billion, or US$2.5 per common share. 

As a company, Suncor’s value proposition includes long-life and competitively advantaged assets. It also focuses on operational reliability with disciplined investment and cost management. In addition, the stock’s conservative payout ratio makes the company’s current dividend yield appear to be sustainable. I think now is the right time to invest in this company without hesitation. 

Should you invest $1,000 in Enerplus right now?

Before you buy stock in Enerplus, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Enerplus wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

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 Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alimentation Couche-Tard. The Motley Fool recommends Fortis. The Motley Fool has a disclosure policy.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Dividend Stocks

A close up color image of a small green plant sprouting out of a pile of Canadian dollar coins "loonies."
Dividend Stocks

I’d Put $15,000 in These 3 Dividend-Growth Champions for Increasing Income Potential

Want to offset some volatility? Here are three defensive dividend-growth champions that can generate a juicy yield right now.

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

Transform Your TFSA Into a Cash-Creating Machine With $7,000

Discover how the Tax-Free Savings Account can be your golden goose for generating cash without losing your investment.

Read more »

monthly desk calendar
Dividend Stocks

How I’d Invest $10,000 in Canadian Value Stocks for Monthly Dividend Income

A $10,000-diversified portfolio of value stocks focusing on dividend safety, yield, growth, and payment schedules can provide a reliable source…

Read more »

a person watches a downward arrow crash through the floor
Dividend Stocks

Is This Correction Your Chance? Top 4 Canadian Dividend Stocks on Sale

Stocks may be down, but now is your chance to get some of these top dividend stocks on sale.

Read more »

Confused person shrugging
Dividend Stocks

Where to Invest $2,500 in the TSX Today

These TSX stocks offer attractive dividends and a shot at decent upside on a rebound.

Read more »

Pile of Canadian dollar bills in various denominations
Dividend Stocks

Invest $25,000 in These Dividend Stocks for $1,956.66 in Annual Passive Income

Dividends stocks can make a huge difference, even if shares don't move an inch. And these might be the best.

Read more »

Pile of Canadian dollar bills in various denominations
Dividend Stocks

Got $5,000? 5 Income Stocks to Buy and Hold Forever

These income stocks have a solid dividend-payout history that can help you earn stress-free passive income.

Read more »

grow money, wealth build
Dividend Stocks

Why I’d Invest $10,000 in This Undervalued Dividend-Growth Stock for Decades of Income

This undervalued dividend stock offers a high yield of over 8% and can help you earn more than $200 in…

Read more »