Top Canadian dividend stocks can help you earn stress-free income regardless of the volatility in the market. Notably, these Canadian stocks have consistently rewarded their shareholders with higher dividend payments. The solid payout history of these companies shows the resiliency of their businesses, ability to expand earnings, and sustainable yields. Against this background, here are my top three picks with stellar dividend payments, a growth history, and solid fundamentals to support their future payouts.
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Canadian Natural Resources stock
Canadian Natural Resources (TSX: CNQ) is one of the top Canadian dividend stocks to earn stress-free passive income. Its balanced and diverse portfolio of assets, well balanced between various grades and types of crude oil, and long-life low decline production position it well to generate stellar funds flow throughout the commodity price cycle, supporting its payouts.
Thanks to its resilient earnings and adjusted funds flow, Canadian Natural Resources has increased its dividend for 25 consecutive years. Moreover, its dividend grew at a compound annual growth rate (CAGR) of 21%.
The oil and natural gas company is well-positioned to increase its dividend in the coming years. Its long-life low decline production, low reserves replacement costs, and efficient operations will likely generate substantial and sustainable adjusted funds flow, which will support its higher payouts. Moreover, the energy company is also likely to benefit from its substantial inventory of low capital exposure projects, extensive infrastructure network, undeveloped land base, and strategic acquisitions.
Canadian Natural Resources pays a quarterly dividend of $0.563 per share, reflecting a dividend yield of 4.4%.
Canadian Utilities stock
Canadian utility companies are well-regarded for their stable, stress-free dividends. Their resilient regulated assets and predictable cash flows enable them to deliver low-risk earnings and distributable cash flows that support higher dividend payments.
Within the Canadian utility sector, Canadian Utilities (TSX: CU) is one of the most reliable stocks for passive income investors. It has raised its dividend for 52 consecutive years. Moreover, it offers a worry-free yield of 5%.
Its diversified operations and regulated and contracted asset base drive its earnings and support higher payouts. Canadian Utilities remains on track to increase its dividends further due to its growing rate base. The company expects its rate base to increase at a low to mid-single-digit rate in the medium term, enabling it to grow its low-risk earnings and future dividend payments. Further, the company is optimizing its energy infrastructure, targeting new growth platforms, and focusing on efficiency, which will bolster its earnings and payouts.
Bank of Montreal stock
Bank of Montreal (TSX: BMO) is another top Canadian stock to earn stress-free passive income. The financial services giant has paid dividends for 195 years, the longest by any Canadian company. Its solid dividend payment history reflects its ability to grow profitability regardless of market conditions. Furthermore, it shows management’s commitment to enhancing shareholder value.
The leading Canadian bank has increased its dividend at a CAGR of 5% over the last 15 years. Moreover, Bank of Montreal offers an attractive dividend yield of 4.8%.
Bank of Montreal’s well-diversified revenues, supported by a strong wealth management business, provide a solid foundation for growth. Moreover, its growing deposit base, operational leverage, solid balance sheet, and steady credit performance bode well for earnings growth. Bank of Montreal’s bottom line is forecasted to increase at a high single-digit rate over the next few years, which is a promising sign for continued dividend growth in the future.
