If you’re looking for reliable stocks that you can buy now and have confidence holding forever, companies that offer essential services are unquestionably some of the best.
That’s why high-quality infrastructure stocks are some of the best investments Canadian investors can buy for their portfolios.
So, if you’ve got cash that you’re looking to invest and want to boost your passive income or shore up your portfolio, or both, here are four of the best infrastructure stocks you can buy on the TSX.
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Two of the best infrastructure stocks to buy now
When it comes to high-quality stocks that you can buy now and hold for years, two of the best are Brookfield Infrastructure Partners (TSX: BIP.UN) and Enbridge (TSX: ENB), the massive $141 billion energy infrastructure giant.
However, these aren’t just two of the best infrastructure stocks; they are two of the best dividend growth stocks in Canada.
Brookfield is an ideal long-term investment due to its significant portfolio of essential assets that allow it to consistently generate sustainable cash flow. Its portfolio is diversified by asset type, owning businesses such as ports, railroads, data centres and more, but it’s also diversified geographically.
Furthermore, the fact that roughly three-quarters of its revenue is indexed to inflation gives Brookfield a significant competitive advantage and makes it one of the most defensive stocks you can buy.
On the other hand, Enbridge has a tonne of similarities. Its services, such as transporting oil and gas, are essential to the North American economy, giving it a tonne of resiliency and allowing it to consistently increase its cash flow every single year.
So it’s no surprise that in addition to being reliable defensive stocks, both companies are also some of the top dividend growth stocks you can buy.
Brookfield, for example, aims to increase its distributions by 5% to 9% each year, and its current yield is sitting at roughly 4.9%.
Meanwhile, Enbridge offers a current dividend yield of 5.8% and has one of the longest dividend growth streaks in Canada, with 30 consecutive years of increasing its dividend.
Plus, on top of the consistent increases to the dividends both stocks offer, each retains cash flow to ensure the dividend remains sustainable, as well as to continue investing in future growth.
So, if you’re looking for top infrastructure stocks to buy now, there’s no question that these two robust businesses are some of the best on the TSX.
Two top utility stocks to help boost your passive income
In addition to Brookfield and Enbridge, high-quality utility stocks such as Fortis (TSX: FTS) and AltaGas (TSX: ALA) are also some of the best and most reliable companies you can buy.
Fortis, for example, is one of the lowest-risk and lowest-volatility stocks in Canada, with a beta of just 0.26.
Its essential services, coupled with the fact that its operations are regulated by the governments in the jurisdictions it operates, ensure that its revenue and cash flow remain highly predictable.
It’s that predictability that makes Fortis such a high-quality and reliable dividend stock. If you thought Enbridge’s 30-year dividend growth streak was impressive, Fortis’ dividend growth streak has lasted for more than half a century, with 51 straight years in which it’s increased its payout to investors.
So, not only can you buy the stock today and lock in a more than 4% yield, but you can also expect Fortis to continue increasing the dividend by 4% to 6% per year through 2029.
Meanwhile, AltaGas doesn’t just provide utility services, roughly 45% of its earnings before interest, taxes, depreciation and amortization comes from its midstream segment, providing higher growth potential than a typical utility.
Yet even with more growth potential, AltaGas remains a reliable investment, especially given its recent progress in deleveraging its balance sheet, divesting non-core assets, and improving the predictability of its cash flow.
Furthermore, it’s also worth noting that while AltaGas’ yield is slightly lower than Fortis’ at just under 3.7% today, it’s expected to increase that dividend by 5% to 7% per year through 2029, a slightly faster pace.
So, if you’re looking for infrastructure stocks to buy that can help shore up your portfolio and increase the passive income it generates, AltaGas and Fortis are undoubtedly two of the best.
