Dividend Powerhouses: Canadian Stocks to Fuel Your Portfolio

These stocks have paid reliable dividends for decades.

| More on:
analyze data

Image source: Getty Images

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 TSX is full of dividend stocks that have paid dividends annually for decades and, in some cases, for centuries. Heading into 2025, interest rates are expected to decline as the Bank of Canada tries to avoid a recession. Lower interest rates should provide additional support for the recent rebound in undervalued dividend stocks.

TC Energy

TC Energy (TSX:TRP) operates 93,000 km of natural gas pipelines and roughly 650 billion cubic feet of natural gas storage capacity in Canada, the United States, and Mexico. The company also has power-generation facilities and is in the process of spinning off its oil pipelines business.

Demand for natural gas is expected to grow in the coming years as new gas-fired power-generation facilities are built to supply electricity for artificial intelligence (AI) data centres. In the U.S. alone, there are more than 300 new AI data centres planned or under construction. TC Energy’s extensive gas infrastructure in the United States positions the company well to benefit.

TC Energy completed a major pipeline project last year and is targeting annual capital investments of about $6 billion over the medium term. This should drive adequate cash flow growth for dividend increases. TC Energy raised the payout in each of the past 24 years. At the time of writing, TC Energy provides a dividend yield of 6.1%.

Bank of Montreal

Bank of Montreal (TSX:BMO) has paid a dividend annually for more than 190 years. The stock is out of favour right now due to high provisions for credit losses (PCL) caused by elevated interest rates and a few large loans that have gone bad at Bank of the West, a U.S. business that Bank of Montreal bought for US$16.3 billion right before U.S. regional banks had a mini meltdown in early 2023. BMO stock trades near $118 right now compared to $150 at one point in 2022.

Created with Highcharts 11.4.3Bank Of Montreal PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Investors should see PCL decline in the coming quarters as interest rates fall in the United States and Canada. The U.S. remains an important market, and Bank of Montreal’s large bet should pay off over the long term. Investors with a contrarian style might want to pick up BMO while it is discounted. At the current share price, investors can get a 5.25% dividend yield.

Fortis

Fortis (TSX:FTS) raised its dividend in each of the past 50 years. Management plans to increase the distribution annually by 4-6% through 2028, supported by a $25 billion capital program that will boost the rate base from $37 billion in 2023 to more than $49 billion over five years.

Fortis gets nearly all of its revenue from rate-regulated assets, including natural gas distribution utilities, power-generation stations, and electricity transmission networks. The predictability of the cash flow helps Fortis plan its growth strategy and enables it to provide solid dividend guidance.

The bottom line

TC Energy, Bank of Montreal, and Fortis pay good dividends that should continue to grow. If you have some cash to put to work in a self-directed dividend portfolio, these stocks deserve to be on your radar.

Should you invest $1,000 in Allied Gold right now?

Before you buy stock in Allied Gold, 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 Allied Gold 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.

The Motley Fool recommends Fortis. The Motley Fool has a disclosure policy. Fool contributor Andrew Walker has no position in any stock mentioned.

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 Investing

hand stacks coins
Dividend Stocks

How I’d Invest $20,000 in Canadian Stocks for Lasting Generational Wealth

Long-term investors willing to be patient with their money should have these three TSX stocks to build lasting wealth.

Read more »

four people hold happy emoji masks
Dividend Stocks

The Best Canadian Dividend Stocks to Buy in April 2025

Canadian dividend stocks are some of the best options out there, and these few look like some of the best.

Read more »

data analyze research
Investing

5 Canadian Value Stocks to Hold in Your TFSA for Patience-Rewarding Returns

These stocks all pay good dividends and currently look oversold.

Read more »

Canadian dollars are printed
Dividend Stocks

How I’d Use $10,000 to Transform My TFSA Into a Cash-Generating Machine

It may be grim out there, but there are plenty of sky-high dividend yields to choose from on the TSX…

Read more »

tsx today
Stock Market

TSX Today: What to Watch for in Stocks on Thursday, April 10

In addition to the important U.S. consumer inflation report, TSX investors will also keep a close eye on developments related…

Read more »

Canada day banner background design of flag
Dividend Stocks

Top Canadian Stocks to Buy Right Now With $5,000

Looking for some safe, long-term stocks? These Canadian stocks are where you should look first.

Read more »

money goes up and down in balance
Investing

Where I’d Invest $5,000 in 5 Cheap Canadian Stocks for Value and Growth

$5,000 can buy five cheap Canadian stocks offering both value and price appreciation in 2025.

Read more »

cloud computing
Investing

Got $5,000 to Invest? 3 Insurance Stocks to Buy and Hold Forever

Insurance stocks have been great long-term investments. Here are three top stocks to add if the market pulls back.

Read more »