When it comes to retirement planning, the power of dividends cannot be overlooked. These steady payouts can act as the financial building blocks of a well-funded retirement, especially when they come from fundamentally strong companies.
By investing in top Canadian dividend-paying stocks, you will collect checks every quarter and benefit from the potential for long-term growth. Moreover, reinvesting dividends over time can dramatically increase your wealth, leading you on the path toward a financially secure retirement.
To start, here are two top Canadian stocks known for their strong dividends and growth potential that can help you build substantial retirement savings.
Canadian Natural Resources
Investors looking for reliable stocks for a well-funded retirement could consider Canadian Natural Resources (TSX:CNQ). The oil and gas producer is growing its dividend at an exceptional pace and consistenty rewards its shareholders with higher payments. Thanks to its high-quality assets and ability to increase production, it also offers solid growth potential.
Canadian Natural Resources has built a reputation as a dividend powerhouse. The company has increased its dividend payments every year for the past 25 years, and its dividend grew at a compound annual growth rate (CAGR) of 21% during the same period. The resiliency of its payouts and high growth reflect the company’s commitment to rewarding its shareholders with higher cash returns in all market conditions.
Currently, Canadian Natural Resources offers an attractive dividend yield of 4.9%. But it’s not just about dividends. The company’s shareholders have also enjoyed solid capital appreciation. Over the past five years, the stock has climbed by an impressive 177%, significantly outpacing market averages. Its stellar dividend growth and potential to deliver above-average capital gains make it a solid long-term stock.
The company’s diversified and long-life asset base, high-quality reserves, and low-maintenance capital requirements provide a stable foundation for growth. Additionally, Canadian Natural Resources is likely to benefit from a disciplined capital allocation strategy and a rock-solid balance sheet, ensuring that it can continue to fund growth initiatives while maintaining and even enhancing its dividend payouts.
Enbridge
When it comes to building a reliable retirement portfolio, Enbridge (TSX:ENB) is a no-brainer for generating steady dividend income and decent capital gains. Enbridge’s vast pipeline network transports oil and gas. Moreover, it is steadily expanding its renewable energy portfolio and investing in utility-like projects. This diversification and resilient cash flow have enabled the company to grow its dividend consistently.
This dividend growth trend is likely to continue, driven by the high utilization rate of its assets and diverse revenue streams.
The company’s extensive pipeline network connects key supply and demand regions in North America. Thus, these assets operate at high capacity, generating robust earnings and distributable cash flow (DCF). Moreover, long-term contracts and regulated tolling frameworks add to the stability of Enbridge’s earnings, allowing it to maintain a reliable growth trajectory and fund its dividend-growth strategy.
Enbridge is strengthening its cash flows by investing in conventional and renewable energy assets. Further, its strategic acquisitions augur well for growth and add stability. The company’s recent addition of three premier gas utilities to its portfolio enhances its cash flow and strengthens its position for long-term growth. These acquisitions and an expanding asset base position Enbridge to capitalize on rising global energy demand.
Enbridge will likely bring several multi-billion-dollar secured growth projects online over the next few years. These initiatives will significantly bolster its earnings base, supporting dividend growth and stock price. Overall, Enbridge stock ensures steady dividend income, high yield, and decent capital gains in the long run.
