Dividend stocks pay you regularly just for holding them. Thus, Dividend Royalty stocks are attractive options for investors seeking decades of passive income. These companies have a proven track record of consistently paying and growing dividends over time, making them ideal for building a long-term income stream.
With this background, let’s look at two fabulous Dividend Royalty stocks with the resilience to pay and increase their payouts in various economic environments. By investing in these Canadian stocks, you can secure a steady flow of income that could last for decades.
Fortis
Fortis (TSX: FTS) is an exceptional stock that has generated decades of worry-free passive income. This Canadian electric utility company has a solid reputation for paying and increasing dividend payments, even in turbulent market conditions. Fortis’s commitment to enhancing shareholder value and visibility on future payouts makes it a compelling investment choice for those seeking reliable passive income.
Fortis’s dividend distributions are supported by its regulated business model, which generates predictable and growing cash flows. This model has allowed the company to raise its dividend for an impressive 50 consecutive years. Moreover, Fortis is poised to expand its earnings base and anticipates growing its dividend by 4-6% per annum through 2028. While Fortis will likely increase its annual dividends, it currently offers a worry-free yield of 3.9%.
Fortis’s nearly all of the earnings come from its regulated utility assets. This means that investors can count on its payouts being safe over the long term. Further, the company’s emphasis on expanding its rate base through consistent investments in regulated utility infrastructure bodes well for future payouts. Fortis expects its rate base to grow by approximately 6.3% annually through 2028. This will expand its earnings base and translate into higher dividend payouts for shareholders.
Bank of Montreal
Investors looking for fabulous stocks for decades of passive income can consider adding shares of top Canadian banks. The leading Canadian banks have uninterruptedly paid dividends for decades, making them ideal options for earning safe and growing dividend income. Among the top names, Bank of Montreal (TSX: BMO) stands out for its longest record of dividend payments.
The banking giant has paid dividends for over 195 years, the longest by any publicly traded Canadian company. Moreover, this financial services company has increased its dividend at a compound annual growth rate (CAGR) of 5% in the last 15 years. The bank expects its earnings to grow at a CAGR of 7-10% over the medium term. Its growing earnings base positions it well to continue raising its dividend by at least a mid-single-digit rate.
Bank of Montreal’s earnings will likely be driven by its diversified revenue streams, expansion of its balance sheet, and operational efficiency. These factors and solid credit performance will enable the bank to distribute higher dividends.
The bank offers a quarterly dividend of $1.55 per share, translating into an attractive dividend yield of 5.3%.
Bottom line
In summary, Dividend Royalty stocks such as Fortis and Bank of Montreal are excellent choices for investors seeking reliable and long-term passive income due to their consistent and growing payouts. These Canadian companies have fundamentally strong businesses, resilient payouts, and a growing earnings base to support future distributions.
