Investing in top dividend stocks can generate a consistent and growing passive income in all market conditions. The TSX has several stocks that consistently pay and increase their dividends. Moreover, their solid fundamentals, resilient business model, and growing earnings base position them well to offer higher payouts over time, making them the smartest dividend stocks.
Against this backdrop, here are the three Canadian dividend stocks to buy now with $1,000.
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Smartest dividend stock #1
Canadian National Railway (TSX: CNR) is a compelling bet for investors looking for the smartest dividend stocks. It operates an extensive rail network and plays a significant role in Canada’s supply chain. Its services are essential to the economy, leading to steady demand for its offerings and stabilizing its operations in all market conditions.
Thanks to its defensive business model, the company generates resilient earnings and cash flows, which enable it to reward its shareholders with higher dividends. Canadian National Railway has recently raised its annual dividend by 5% for 2025. Including this hike, it has increased its dividend for 29 consecutive years.
Its focus on expanding its rail network, diversified exposure to various sectors, and efforts to improve operational efficiency will likely help it deliver steady earnings and dividend growth. The company expects to generate 10%-15% adjusted EPS (earnings per share) growth in 2025. Further, it anticipates its adjusted EPS to grow in the high single-digit range through 2026. Its continued earnings growth will enable it to return higher cash to its shareholders through increased dividends.
Smartest dividend stock #2
Investors planning to invest in the smartest dividend stocks could also consider Canadian Natural Resources (TSX: CNQ) stock. The oil and gas producer has a high-quality, diversified asset base, which enables it to generate solid financials and robust free cash flows that support its stock price and higher dividends.
Notably, shares of Canadian Natural Resources grew at a compound annual growth rate (CAGR) of 25.8% in the last five years, delivering capital gains of over 216%. Moreover, Canadian Natural Resources has increased its dividend for 25 consecutive years with a CAGR of 21%.
Canadian Natural Resources’s diversified production mix, low maintenance capital requirements, and long-life, low-decline asset base allow it to generate higher returns on capital, reduce net debt, and boost shareholder value. The energy company also focuses on improving efficiency, allocating capital to high-growth projects, and optimizing the product mix. Further, its strategic acquisitions and a strong balance sheet enable it to deliver strong free cash flow, pay higher dividends, and push its stock higher.
Smartest dividend stock #3
Telus (TSX: T) is a leading wireless service provider. Its ability to generate consistent earnings and enhance its shareholder value through higher dividends, sustainable payouts, and reliable yields makes it one of the smartest dividend stocks. Since 2011, Telus has raised its dividend 27 times under its multi-year dividend-growth program. Moreover, it has paid over $21 billion in dividends since 2004. Besides solid payouts, the company offers a compelling yield of 7.6%.
The telecom company is focusing on growing and retaining its customer base and improving average revenue and margin per user. These initiatives will enable it to generate resilient earnings and cash flows, supporting its payouts.
Furthermore, Telus is optimizing its product portfolio and brand mix to improve its financials. The expansion of its PureFibre network and growing demand for its bundled services will likely drive customer growth. Additionally, Telus is streamlining operations, leveraging digital transformation, and lowering its costs. These measures bode well for future earnings, cash flows, and higher dividend payments.
