Investors looking for reliable dividend stocks to lean on in uncertain times could consider Canadian companies with stellar dividend payment histories and visibility over future payouts and earnings growth. These fundamentally strong companies are most likely to maintain and consistently increase their distributions regardless of economic and market conditions.
Against this backdrop, here are three reliable Canadian dividend stocks with well-established businesses to generate stress-free passive income.
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Dividend stock #1
Investors seeking reliable dividend stocks could add top Canadian utility stocks to their portfolios. Utility companies operate essential, rate-regulated businesses, making them largely immune to economic turbulence. Their predictable cash flows allow them to consistently pay and grow dividends, even in challenging times.
Fortis (TSX:FTS) is a top choice among the leading utility stocks for its stellar dividend growth history and visibility over future payouts. Fortis’ dividends are supported by a regulated business model that ensures stable earnings regardless of market conditions.
Nearly all (about 99%) of Fortis’s assets are in regulated utilities, providing a reliable foundation for predictable and growing cash flows. Moreover, its operations primarily focus on energy transmission and distribution, a low-risk business segment offering resilience against price volatility and generating consistent income.
Fortis has raised dividends for 51 consecutive years. Moreover, management continues prioritizing higher dividend payments to enhance shareholders’ value. Looking ahead, Fortis plans to expand its rate base by 6.5% annually through 2029. The growing rate base will expand its earnings and enable it to pay increased dividends. Fortis projects a 4–6% increase in dividends each year through 2029. Further, it offers a well-covered yield of 4.1%.
Dividend stock #2
Investors could consider adding top Canadian bank stocks to their portfolio for reliable dividend income. Notably, the leading Canadian financial services giants are popular for their solid track record of dividend payments, with some surpassing a century of uninterrupted distributions. These attributes make them dependable choices for income-focused investors.
Among the top Canadian bank stocks, Bank of Montreal (TSX:BMO) could be a top investment for its unmatched dividend payment history. It has distributed dividends for 195 consecutive years – longer than any other publicly traded Canadian company. Further, its dividend grew at a CAGR of 5% in the past 15 years. This reflects its resilience and ability to generate sustainable earnings across economic cycles.
The bank’s diversified revenue streams, ability to expand its loan book and deposit base, solid credit quality, and improving efficiency will likely drive its earnings and dividend payments. Bank of Montreal sees high single-digit earnings growth over the medium term. A growing earnings base will support future dividend increases. Moreover, it offers a high yield of 4.6%.
Dividend stock #3
Enbridge (TSX:ENB) could be another solid addition to your portfolio for worry-free income. It has increased its dividend for 30 consecutive years. It’s worth noting that Enbridge consistently paid and increased its dividend during the COVID-19 pandemic when most energy companies either suspended their payouts or announced a cut due to the lack of demand. This shows the resiliency of Enbridge’s business model and ability to grow its distributable cash flows (DCF) in all market conditions.
Enbridge focuses on rewarding its shareholders with higher dividend payments. The company’s diversified revenue sources, higher asset utilization rate, long-term contracts, and regulated tolling frameworks support its DCF and payouts.
The energy transportation company’s earnings and DCF per share are projected to increase at a mid-single-digit rate. This will enable Enbridge to distribute higher dividends in the coming years. Besides reliable dividends, Enbridge stock offers a high yield of over 6.1%.
