Got $5,000? 5 Income Stocks to Buy and Hold Forever

These income stocks have a solid track record of dividend payments and visibility over future earnings and payouts.

| More on:
Sliced pumpkin pie

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

The top Canadian dividend stocks with strong fundamentals, a resilient business model, and a growing earnings base are solid investments to generate regular passive income in all market conditions. So, if you’ve got $5,000, here are five Canadian stocks to buy and hold forever to enhance the income potential of your portfolio.

Canadian Utilities

Canadian Utilities (TSX:CU) is a no-brainer dividend stock. The electric utility company has a low-risk earnings base that enables it to pay and increase its dividends regardless of the economic situation. For instance, it has increased its dividends for an uninterrupted 52 years, the longest among all Canadian companies. Moreover, the utility stock offers a solid yield of 5.2%.

Created with Highcharts 11.4.3Canadian Utilities PriceZoom1M3M6MYTD1Y5Y10YALL6 Apr 20202 Apr 2025Zoom ▾Jul '20Jan '21Jul '21Jan '22Jul '22Jan '23Jul '23Jan '24Jul '24Jan '2520212021202220222023202320242024202520252025303540www.fool.ca

The company’s payouts are supported through its highly regulated business model that generates predictable cash flows. Canadian Utilities’s ongoing investment in regulated utilities and long-term contracted assets will likely expand its rate base and drive earnings, supporting higher dividend payments. Moreover, its payouts remain well-protected through the growing rate base.

Enbridge

Enbridge (TSX:ENB) has a solid record of paying dividends for seven decades, making it worth buying and holding forever. Moreover, this Dividend Aristocrat has raised dividends for three decades. Besides its stellar dividend-growth history, the energy giant offers an attractive yield of 6.2%.

Created with Highcharts 11.4.3Enbridge PriceZoom1M3M6MYTD1Y5Y10YALL6 Apr 20202 Apr 2025Zoom ▾Jul '20Jan '21Jul '21Jan '22Jul '22Jan '23Jul '23Jan '24Jul '24Jan '252021202120222022202320232024202420252025203040506070www.fool.ca

The company’s diversified revenue streams, long-term contracts, regulated tolling frameworks, and higher utilization of its pipeline system will drive its earnings and distributable cash flow (DCF). Further, Enbridge’s investments in traditional and renewable energy assets, strategic acquisitions, and secured capital projects are expected to enhance its cash flow, supporting dividend growth.

Enbridge projects a mid-single-digit growth in its earnings and DCF per share, which implies its dividend could increase at a similar pace. Moreover, its payout ratio of 60-70% of DCF looks sustainable.

Telus

The leading wireless service provider Telus (TSX:T) is a solid income stock. Its ability to grow profitably allows it to return higher cash to its shareholders. The communications company has distributed over $21 billion in dividends since 2004 and has raised its dividend 27 times since 2011. Additionally, it offers an ultra-high yield of over 8%.

Created with Highcharts 11.4.3TELUS PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Telus’s focus on growing its customer base, reducing churn, and lowering costs enables it to deliver higher profits and, in turn, supports its payouts. Further, the company’s expansion of network infrastructure and entry into high-growth avenues such as cybersecurity and digital transformation bode well for future growth.

TC Energy

TC Energy (TSX:TRP) is another compelling bet for income investors. This energy infrastructure company’s dividend has grown at a CAGR of 7% since 2000. TC Energy’s highly contracted and regulated asset base enables it to generate solid earnings and cash flow, supporting higher dividend payments.

Created with Highcharts 11.4.3Tc Energy PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

The energy giant’s high asset utilization rate and secured capital projects will expand its earnings and drive cash flows. Further, its focus on productivity savings and debt reduction will enable TC Energy to boost shareholder value through higher payouts. Over the long term, it projects a 3-5% annual increase in its dividends and offers a healthy yield of 5.6%.

Bank of Montreal

Bank of Montreal (TSX:BMO) is a solid income stock for its unmatched dividend payment history. Notably, this leading Canadian bank stock has distributed dividends for 195 consecutive years — longer than any other Canadian company. Further, its dividend grew at a compound annual growth rate of 5% in the past 15 years, reflecting its ability to generate sustainable earnings across economic cycles and commitment to return higher value to its shareholders.

Created with Highcharts 11.4.3Bank Of Montreal PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

The financial services company’s diversified revenue stream, ability to expand its loan book and deposit base, steady credit performance, and improving efficiency will likely drive its earnings and dividend payments. Bank of Montreal sees high single-digit earnings growth over the medium term, which will likely support future dividend increases. Moreover, it offers a high yield of 4.6%.

Should you invest $1,000 in Bank of Montreal right now?

Before you buy stock in Bank of Montreal, 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 Bank of Montreal 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.

Fool contributor Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge and TELUS. The Motley Fool has a disclosure policy.

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

grow money, wealth build
Dividend Stocks

Why I’d Invest $10,000 in This Undervalued Dividend-Growth Stock for Decades of Income

This undervalued dividend stock offers a high yield of over 8% and can help you earn more than $200 in…

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

Here’s Exactly How a $20,000 TFSA Could Potentially Grow to $200,000

Index funds like the iShares S&P/TSX Capped Composite Index (TSX:XIC) are tax free in a TFSA.

Read more »

Dividend Stocks

How I’d Invest $6,000 in Canadian Real Estate Stocks to Build Lasting Wealth

Canadian REITs on sale! See how grocery-anchored retail properties offering 9% yields could turn $6,000 into lasting wealth despite US…

Read more »

rain rolls off a protective umbrella in a rainstorm
Dividend Stocks

Economic Headwinds: Should You Still Consider Buying the Dip?

A market dip might seem like a bumpy road, but it can be far smoother in the future with the…

Read more »

e-commerce shopping getting a package
Dividend Stocks

Consumer Spending Plays Amidst the Current Market Dip

Consumption may go down in market dips, but certain consumer stocks are certainly better off than others.

Read more »

Asset Management
Dividend Stocks

12% Dividend Yield! I’m Buying This TSX Stock and Holding for Decades

Stocks with high-dividend yields carry risks. But they could be a good long-term investment. Here is a 12% dividend stock…

Read more »

Canadian flag
Dividend Stocks

How I’d Build a Foundation of Canadian Value Stocks in My Investment Strategy

Canadian investors can explore iShares Canadian Value Index ETF for value stock ideas to build a foundation for their diversified…

Read more »

Canadian dollars are printed
Dividend Stocks

How I’d Transform a $30,000 TFSA Into a Cash-Flow Machine

Here's why TFSA investors should consider owning dividend stocks such as Mullen Group in 2025.

Read more »