Investing in top-quality dividend stocks is a smart strategy for generating steady passive income. Notably, several TSX stocks consistently pay and increase their dividends regardless of market conditions, making them no-brainer investments. With this backdrop, here are five fundamentally strong dividend stocks to buy now for less than $1,000.
Canadian Natural Resources stock
Canadian Natural Resources (TSX:CNQ) is a no-brainer dividend stock for investors looking for a growing passive income. This oil and gas company has consistently rewarded its shareholders through higher payouts. Notably, this energy company has uninterruptedly increased its dividend for 25 years at a compound annual growth rate (CAGR) of 21%. Further, it offers a high yield of 4.4%.
Canadian Natural Resources will likely benefit from its long life, low-decline assets, and high-return, low-capital-intensive projects. This will likely boost its adjusted funds flow, supporting higher dividend payouts. Moreover, its strong balance sheet, focus on acquisitions, and improved efficiency bodes well for future cash flows and dividend payments.
Brookfield Renewable Partners stock
Investors can consider Brookfield Renewable Partners (TSX:BEP.UN) stock for its ability to consistently pay and increase its dividends. This renewable energy company has raised its dividend at a CAGR of 6% since 2001. Further, it plans to grow its payouts by 5-9% annually over the long term.
Brookfield’s solid payouts reflect its ability to generate predictable cash flows, backed by its highly diversified renewable energy assets, power-purchase agreements, and long-term contracts.
Brookfield’s large operating fleet and robust development pipeline of renewable power-generating facilities position it well to capitalize on the growing green energy demand and deliver consistent fund flows. Further, the company’s focus on strategic acquisitions and investments in innovative solutions like battery energy storage augur well for future growth.
BCE stock
BCE (TSX:BCE) is another no-brainer stock for income investors. This leading Canadian communication company has made regular dividend payments and even raised it for 16 consecutive years. Further, it offers a compelling yield of 10.5% near the current price levels. The telecom company is profitably expanding its user base and implementing cost-reduction measures to generate solid earnings, which will support its future payouts.
BCE’s focus on high-growth segments such as cloud computing, digital advertising, and cybersecurity services will drive its top-line growth. Furthermore, its investment in fast 5G mobile services, extensive broadband fibre network, and targeted promotions will likely drive user growth and support its payouts.
Fortis stock
With a defensive business model and growing earnings base, Fortis (TSX:FTS) is one of the most reliable Canadian dividend stocks. This utility company has increased its dividends for 51 consecutive years, making it a Dividend King. Its regulated business and growing rate base help generate predictable earnings and cash flows, supporting its dividend payments.
Notably, the company’s rate base is expected to increase to $53 billion by 2029 from $38.8 billion in 2024, reflecting a CAGR of 6.5%. The rate base expansion will continue to drive the company’s earnings, enabling it to increase its dividend by 4-6% each year through 2029. In addition, Fortis’s investments in energy transition projects and focus on strengthening its infrastructure and customer growth augur well for future earnings growth.
Bank of Montreal stock
Bank of Montreal (TSX:BMO) is another no-brainer stock for regular dividend income. This leading Canadian bank has paid dividends for 195 consecutive years, the longest dividend distribution streak by any publicly traded Canadian company. Further, this financial services company has raised its dividend by about 5% annually in the past 15 years.
Bank of Montreal’s impressive dividend payment and growth history reflects its ability to grow its earnings consistently. Further, the bank’s diversified revenue streams, growing deposit base, stable credit performance, and operational efficiency support its earnings, enabling higher dividend payments.
Notably, Bank of Montreal expects high single-digit earnings growth over the medium term, which implies a consistent increase in its dividend in the upcoming years.
