Investing in top Canadian stocks with strong fundamentals and a history of consistent dividend payments and growth can help you secure a reliable passive income stream. Further, these companies have a solid earnings base and growing cash flows to support their payouts. Thanks to their solid financial footing, these stocks will add stability to your portfolio. Thus, considering the benefits of stability and income, everyone should own a few high-quality dividend stocks.
With this background, here are two Canadian dividend stocks everyone should own.
Source: Getty Images
Fortis stock
Fortis (TSX:FTS) is one of the top Canadian dividend stocks everyone should own. This electric utility company has a stellar record of delivering predictable and growing cash flows, which translates to higher returns for shareholders.
Fortis’s attractiveness stems from the strength of its business model. An impressive 99% of its earnings come from regulated utilities, ensuring stability even in uncertain economic times. Additionally, 93% of its operations focus on energy transmission and distribution, which generates low-risk earnings regardless of market conditions and adds stability.
Fortis has raised its dividend for 51 consecutive years, reflecting its financial strength and commitment to enhancing its shareholders’ value. Further, Fortis plans to continue raising its dividend in the coming years. With multi-billion-dollar secured projects in the pipeline, its rate base is expected to expand at a compound annual growth rate (CAGR) of 6.5% through 2029. This growth will fuel higher earnings, allowing Fortis to increase its dividend at a CAGR of 4-6% in the coming years.
Fortis’s defensive business model, solid dividend growth history, expanding rate base, growing earnings, and visibility over future payouts make it a must-have dividend stock. Moreover, the Canadian utility giant offers a dividend yield of about 4%.
Bank of Montreal stock
Leading Canadian banks represent an attractive opportunity for investors seeking stable and consistent dividend income. Renowned for their strong financials and long history of dividend payments, these institutions have demonstrated resilience across economic cycles. Some of Canada’s top financial services firms have maintained uninterrupted dividend distributions for over a century, making them a compelling choice for income-focused portfolios.
Bank of Montreal (TSX:BMO) is an attractive dividend-paying stock among these financial companies. With an unparalleled history of 196 consecutive years of dividend payments, BMO is the longest-running dividend payer among publicly traded Canadian companies. Over the past 15 years, the bank has increased its dividend at a CAGR of 5.4%, reflecting its ability to sustain earnings growth and reward shareholders even amid market fluctuations.
BMO’s ability to maintain and expand its dividend payments is supported by its diversified revenue streams, expanding loan book, and growing deposit base. In 2024, the bank reported a significant increase of $61 billion in customer deposits across all its franchises, marking a robust 9% year-over-year growth. Additionally, its strong credit quality, operating leverage, and disciplined expense management contribute to its long-term financial stability.
BMO’s focus on enhancing operational efficiency and reducing non-interest expenses positions it well for sustained earnings growth. Further, its strong balance sheet capacity positions it well to capitalize on growth opportunities. The bank anticipates high single-digit earnings growth over the medium term, which is expected to support further dividend increases.
Given its solid financial foundation, commitment to shareholder returns, strong balance sheet, and dividend yield of 4.4%, Bank of Montreal is a must-own dividend stock.
