As the market remains volatile amid macro uncertainty, adding a few blue-chip stocks to the portfolio becomes essential for stability and regular income. These are large, well-established Canadian companies with strong fundamentals, diversified sources of income, and a solid history of dividend growth.
These Canadian stocks can potentially deliver notable capital gains over time and boost your portfolio’s income-generation capabilities. Against this background, here are three blue-chip dividend stocks everyone Canadian should own.
Blue-chip stock #1
Enbridge (TSX:ENB) is a top Canadian blue-chip stock to own. This oil and gas transportation company’s resilient business model and diversified cash flows support its stock price and dividend payouts.
Enbridge stock has gained over 40% in one year. Moreover, this integrated energy infrastructure company has consistently paid and increased its dividend. For instance, it has paid dividends for seven decades and raised it for 30 consecutive years. Moreover, Enbridge stock offers an attractive yield of 6.1%.
The company’s extensive network of liquid pipelines connects major supply and demand areas. Thus, its assets witness a high utilization rate. Further, its low-risk commercial arrangements, such as take-or-pay contracts and power purchase agreements, add stability to its business.
Enbridge will continue to benefit from its highly diversified assets, minimal exposure to commodity price fluctuations, and investments in renewable energy projects. Moreover, its focus on strategic acquisitions, low-risk growth projects, and cost optimization through automation will drive its financials and future payouts.
Enbridge’s management sees mid-single-digit growth in its earnings per share in the long term. Its growing earnings base will drive higher payouts and support its stock price.
Blue-chip stock #2
Fortis (TSX:FTS) is another attractive blue-chip stock every Canadian should own. The electric utility company’s low-risk, regulated business model and growing earnings base enable it to return more cash to its shareholders. Moreover, it adds stability to your portfolio amid volatility.
Thanks to its resilient cash flows, Fortis has raised its dividends for 51 consecutive years, making it Canada’s one of the most reliable dividend-growth stocks. Besides offering steady income in all market conditions, this utility company has a decent yield of 3.7%.
Fortis’s durable payouts are backed by its resilient business model and diversified portfolio of regulated assets, which generates low-risk earnings and predictable cash flows. Further, its growing rate base and capital investments augur well for future growth. Moreover, its solid transmission investment pipeline and energy transition opportunities bode well for future growth and will likely support its payouts and share price.
The company’s $26 billion capital plan will help expand its rate base at a compound annual growth rate (CAGR) of 6.5% through 2029. This will enable the company to generate low-risk earnings and support dividend hikes. Fortis’s management expects to grow its dividends by 4-6% annually through 2029.
Blue-chip stock #3
Canadian investors should own shares of leading Canadian banks for their resilient business model, consistent earnings growth, and ability to pay and maintain dividends in all market conditions. For instance, Toronto-Dominion Bank (TSX:TD) has paid and increased its dividend for several years. Moreover, this banking giant has delivered decent capital gains over time.
This financial services company has a stellar record of paying dividends for 167 consecutive years. Moreover, TD’s dividend has grown at a CAGR of 10% since 1998, the highest growth among its peers. Besides solid dividend growth, it has a 40-50% sustainable payout ratio. Currently, it offers a decent yield of over 5%. Also, Toronto-Dominion Bank stock has increased at a CAGR of over 12% in the last five years.
The bank’s diversified revenue streams, expansion of loans and deposit base, and focus on improving operating efficiency position it well to deliver solid earnings. Its ability to generate steady earnings and maintain a conservative payout ratio will continue to support its dividend growth. Furthermore, Toronto-Dominion Bank’s solid balance sheet and accretive acquisitions will accelerate its growth, supporting higher payouts and its share price.
