The broader market index is witnessing volatility amid tariff concerns. However, investors can still earn a steady income from top-quality dividend stocks regardless of how the market moves. While several TSX stocks are known for their distributions, these are the three best dividend stocks to buy in Canada right now, in my opinion.
Dividend Stock #1
Fortis (TSX:FTS) is one of the best dividend stocks in Canada, offering worry-free income in all market conditions. This electric utility giant has consistently raised its dividends and returned higher cash to its shareholders. Its diversified portfolio of regulated assets enables it to generate resilient earnings and predictable cash flows, supporting its payouts.
Fortis has increased its distributions for 51 years in a row and is likely to continue the trend. Fortis’s management expects its dividends to grow by 4–6% annually through 2029. While Fortis will return higher cash each year, it also offers a secured dividend yield of 3.9%.
The company’s defensive business model and growing rate base will continue to support its payouts. Further, its solid transmission investment pipeline and opportunities stemming from the energy transition bode well for future growth and payouts.
Fortis’s $26 billion capital plan will likely expand its rate base, which is projected to increase at a compound annual growth rate (CAGR) of 6.5% through 2029. The growing rate base will help the utility company to generate low-risk earnings and pay higher dividends.
Dividend Stock #2
Canadian Natural Resources (TSX:CNQ) is another top stock for investors looking for dividend income. Besides steady income, the energy giant has the potential to deliver solid capital gains over time. Notably, this oil and gas producer has raised its dividend for 25 consecutive years. During this period, its dividend grew at a CAGR of 21%. While its dividend is growing swiftly, CNQ stock offers a compelling yield of 5.1%.
The company’s high-quality diversified assets, ability to increase production, and growing earnings base will support its future payouts. Further, its diversified production mix provides flexibility and resilience even in changing commodity market conditions.
Additionally, most of its liquid production comes from long-life, low-decline assets, which generate steady cash flow while keeping reserve replacement costs low. The company’s $6 billion capital plan for 2025 and solid acquisitions strategy augurs well for future growth. Going forward, Canadian Natural Resources will continue to capitalize on market opportunities and reward investors through consistent dividend growth and share buybacks.
Toronto-Dominion Bank
Investors seeking the best Canadian dividend stocks should consider the leading Canadian banking stocks. Notably, Canada’s leading financial services companies have a stellar track record of dividend distribution, making them a compelling option for generating worry-free income.
One such financial services company is Toronto-Dominion Bank (TSX:TD), which has a stellar record of paying dividends for 167 consecutive years. Moreover, the bank’s dividend has grown at a CAGR of 10% since 1998, the highest growth among its peers. Besides solid dividend growth, it offers a decent yield of over 4.8% and has a sustainable payout ratio of 40–50%.
The bank’s ability to generate steady earnings and maintain a conservative payout ratio supports its dividend growth. Its diversified revenue streams, expansion of loans and deposit base, and operating efficiency also position it well to deliver solid earnings. Furthermore, Toronto-Dominion Bank’s solid balance sheet and accretive acquisitions will accelerate its growth, supporting higher payouts.
