Dividend Powerhouses: Top Canadian Stocks to Enhance Your Portfolio

These stocks have increased the dividend annually for decades.

| More on:
data analyze research

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

A popular strategy for building a self-directed Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) portfolio involves owning quality TSX dividend stocks.

Pensioners can generate steady passive income inside a TFSA. Younger investors might decide to use dividends to buy more shares to harness the power of compounding.

Fortis

Fortis (TSX:FTS) has increased its dividend for 51 consecutive years, including the latest 4.2% hike, and intends to boost the payout by 4-6% annually through at least 2029.

Created with Highcharts 11.4.3Fortis PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Fortis just announced the third quarter (Q3) of 2024 results that came in better than last year, with adjusted net earnings rising from $411 million to $420 million, or $0.85 per share compared to $0.84 per share in the same period last year. For the first three quarters of 2024, net earnings are up $85 million to $1.2 billion in 2023.

Under the new 2025-2029 capital program, the company intends to invest $26 billion on growth projects. The result should be a boost to the rate base from $38.8 billion in 2024 to $53 billion in 2029. As new assets go into service, the increase in revenue and cash flow should support the planned dividend growth.

Falling interest rates will reduce borrowing costs for Fortis. This could lead to more projects being added to the capital plan. Fortis has also expanded through acquisitions in the past. Cheaper financing in the next couple of years might ignite a new wave of consolidation in the utilities sector.

Investors who buy Fortis stock at the current level can get a dividend yield of 4.1%.

Enbridge

Enbridge (TSX:ENB) recently completed the final leg of its US$14 billion purchase of three natural gas utilities in the United States. The acquisitions make Enbridge the largest natural gas utility company in North America.

In the past few years, Enbridge’s investments have focused on diversifying the asset base. The core oil and natural gas transmission infrastructure remains strategically important, but Enbridge is also positioned to take advantage of global demand for oil and natural gas through its investments in export facilities. In addition, Enbridge has a growing renewable energy division that builds solar and wind projects in North America and Europe.

Enbridge’s current $24 billion capital program will help boost revenue and distributable cash flow (DCF) in the next few years. This should provide support for ongoing dividend increases. Enbridge raised the distribution in each of the past 29 years.

Enbridge reported adjusted earnings for the first three quarters of 2024 that are slightly higher than the same period last year. Management confirmed full-year 2024 guidance, with earnings before interest, taxes, depreciation, and amortization (EBITDA) expected to be in the upper end of the guidance range and DCF likely to land in the middle of the 2024 target.

Investors who buy ENB stock at the current level can get a dividend yield of 6.5%.

The bottom line on top TSX stocks for dividends

Fortis and Enbridge are good examples of reliable dividend-growth stocks that pay attractive distributions. If you have some cash to put to work in a portfolio focused on dividend growth and passive income, these stocks deserve to be on your radar.

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

Before you buy stock in Enbridge, 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 Enbridge 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 Enbridge and 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 Dividend Stocks

concept of real estate evaluation
Dividend Stocks

Canadian Real Estate Stocks: How I’d Navigate This Sector With $15,000 During The Pullback

A $15,000 investment split among these two undervalued Canadian defensive REITs could generate high income yields with capital gains upside

Read more »

A worker gives a business presentation.
Dividend Stocks

2 Canadian Dividend Stocks I’d Buy With $3,000 Whenever They Dip in Price

There's no shortage of great Canadian dividend stocks to buy, but these two pose huge upside right now for income…

Read more »

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 »

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 »

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 »

Car, EV, electric vehicle
Dividend Stocks

Outlook for Magna Stock in 2025

Magna stock has sunk into the toilet, but it could now be one of the best undervalued stocks out there.

Read more »

alcohol
Dividend Stocks

Why I’d Consider These 3 Blue-Chip Dividend Stocks for a $20,000 Lifelong Investment

In a market correction, it’s essential to focus on blue-chip stocks that offer stability and long-term growth potential.

Read more »