Investing in top dividend growth stocks offers several advantages. Notably, companies with a track record of increasing dividends provide investors with a growing stream of income. Moreover, reinvesting these dividends can accelerate portfolio growth due to compounding. Furthermore, dividend growth often exceeds the rate of inflation, thereby helping to maintain purchasing power over time. Collectively, dividend payments and the potential for capital appreciation can generate a significant total return on investment.
With this background, here are top Canadian dividend stocks with solid fundamentals and a stellar track record of dividend growth to buy now.
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Canadian Natural Resources stock
Investors seeking top dividend growth stocks could add Canadian Natural Resources (TSX:CNQ) to their portfolios. The oil and natural gas producer has consistently delivered significant returns to shareholders through share repurchases and dividend increases.
Canadian Natural Resources’ diverse asset base provides it with a competitive advantage in allocating capital to the highest-return projects without being reliant on any one commodity. Thanks to its focus on high-return projects, efforts to improve costs, and significant and sustainable free cash flow generation, CNQ stock has increased its dividend for 25 consecutive years. Moreover, the oil and gas company’s dividend grew at a compound annual growth rate (CAGR) of 21% during the same time.
Besides regular income, Canadian Natural Resources stock has appreciated significantly in value, delivering significant total returns. Looking ahead, this energy company will benefit from its long-life low-decline asset base, focus on highest return projects, reduction in net debt, and low maintenance capital requirements. Further, its strong balance sheet and efficient operations will support its payouts.
Overall, Canadian Natural Resources is well-positioned to increase its dividend at a solid pace. Moreover, this dependable income stock offers a high yield of over 4.8%.
Telus stock
Telus (TSX:T) is one of the top dividend growth stocks to buy now in Canada. The leading communication giant has a solid history of dividend payments and growth. Through its multi-year dividend-growth program, the company has consistently returned significant cash to its shareholders. For instance, it has paid about $21 billion in dividends in the last 20 years.
Notably, Telus’ ability to increase its customer base and deliver sustainable earnings enables it to return higher cash to its shareholders. It has increased its quarterly dividend 27 times since 2011. Moreover, Telus stock plans to grow its dividend by a high single-digit rate in 2025. While Telus is a reliable income stock, it offers a compelling yield of over 7.8%.
Telus is poised to deliver profitable growth in the coming years, driven by its focus on average revenue and margin per user. While Telus continues to grow its customer base, its investments in network infrastructure, including the expansion of its pure fibre and 5G offerings, enable it to reduce churn.
Additionally, enhancing its premium bundled services in mobile and fixed sectors will likely drive unit economics by optimizing its product lineup and brand offerings. Furthermore, Telus is reducing operational costs through digital transformation initiatives, which are expected to contribute positively to its financial performance and future dividends.
