Canadian investors are wondering where they can get good dividend growth in a self-directed Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) portfolio. In the current uncertain market conditions, it makes sense to focus on stocks with long histories of raising their distributions through challenging times.
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Enbridge
Enbridge (TSX:ENB) trades near $62.50 at the time of writing compared to $64.50 earlier this month. Investors who buy the stock at the current level can get a dividend yield of 6%.
Enbridge completed a US$14 billion acquisition of three natural gas utilities in the United States last year. These assets provide steady and predictable revenue and go well with Enbridge’s existing natural gas transmission network that moves about 20% of the natural gas used in the United States.
Enbridge is working on a $26 billion capital program that is expected to drive growth in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of 7% to 9% through 2029. This should help support ongoing dividend increases. Enbridge raised the distribution in each of the past 30 years.
Canadian Natural Resources
Canadian Natural Resources (TSX:CNQ) is a contrarian pick right now. The stock trades near $40 at the time of writing compared to more than $50 a year ago. Oil prices bounced in recent days on hopes of progress in trade negotiations between the United States and the rest of the world. OPEC also announced that some members will reduce production to offset planned supply hikes from others in the consortium.
Analysts broadly expect the oil market to be in a surplus situation through most of 2025. A quick resolution on trade negotiations between the United States and China, however, could drive oil prices sharply higher.
CNRL increased its dividend twice in 2024 and raised it again earlier this year, marking the 25th consecutive annual dividend increase from the oil and gas producer. Investors who buy CNQ stock at the current level can get a dividend yield of 5.9%.
Fortis
Fortis (TSX:FTS) owns natural gas utilities, power generation facilities, and electricity transmission networks in Canada, the United States, and the Caribbean. These are primarily rate-regulated businesses that provide reliable and predictable revenue and cash flow in all economic conditions.
Fortis hasn’t made a large acquisition for several years. Growth is currently driven through organic projects, including a $26 billion capital program for 2025 to 2029 that will increase the rate base from $39 billion in 2024 to $53 billion over that timeframe. As the new assets are completed and go into service, Fortis expects cash flow to increase enough to support planned annual dividend increases of 4% to 6%. Acquisitions or new projects could boost the size of the hikes or the growth outlook.
Fortis raised the dividend in each of the past 51 years. The stock currently provides a yield of 3.7%.
The bottom line on top TSX dividend stocks
Enbridge, CNQ, and Fortis pay attractive dividends that should continue to grow. If you have some cash to put to work, these stocks deserve to be on your radar.
