As the market remains volatile amid macro uncertainty, owning a few top-quality dividend stocks could help you add stability to your portfolio and earn stress-free passive income. Notably, several Canadian stocks have been consistently paying and increasing their dividends for decades. Moreover, they have solid fundamentals with resilient payouts, making them attractive investments to earn while sleeping.
Against this background, here are three Canadian dividend stocks to own for a good night’s sleep.
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Canadian Utilities
Canadian Utilities (TSX: CU) is a must-own dividend stock for a good night’s sleep, thanks to its solid history of dividend growth and durable payouts. As a utility company, it operates in a defensive sector, ensuring stable cash flows regardless of market conditions. This stability allows Canadian Utilities to regularly increase its dividends and enhance its shareholder value.
For instance, Canadian Utilities has increased its dividends for 52 consecutive years, the longest dividend growth streak by any publicly traded company in Canada. Besides stress-free dividends, this utility stock offers a compelling yield of 4.7%.
Canadian Utilities’s high-quality assets will continue to generate steady, low-risk earnings, supporting higher dividend growth. The company’s ongoing investments in expanding its regulated asset base will further boost its rate base, enabling it to generate strong cash flows and support higher payouts. Additionally, its contracted infrastructure assets will likely accelerate growth and help maintain and increase dividends over time.
Toronto-Dominion Bank
Investors could consider adding some of the leading Canadian banks to earn worry-free income. Notably, leading Canadian banks like Toronto-Dominion Bank (TSX: TD) are famous for their resilient business model, consistent earnings growth, and ability to pay and grow dividends in all market conditions.
This banking giant has paid dividends for 167 consecutive years. Moreover, TD’s dividend has grown at a compound annual growth rate (CAGR) of 10% since 1998, the highest growth among its peers. Besides attractive dividend growth, it has a conservative payout ratio, which is sustainable in the long term.
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 and ensure steady payouts. Furthermore, Toronto-Dominion Bank’s solid balance sheet and accretive acquisitions will accelerate its growth. TD’s ability to expand its earnings will continue supporting its dividend payments. Currently, it offers a high yield of about 5%.
Canadian Natural Resources
Canadian Natural Resources (TSX: CNQ) is another reliable dividend stock to own for a good night’s sleep. Thanks to its high-quality assets and ability to generate solid cash flows, the Canadian energy giant has raised its distributions at a CAGR of 21% for 25 years. In addition, CNQ stock offers a solid yield of 5.7%. Besides steady income, CNQ stock has delivered stellar capital gains of over 468% in the last five years. Though the stock is currently under pressure due to concerns about recession, CNQ’s fundamentals remain solid, supported by its diversified, high-quality assets.
The energy company’s high-quality portfolio, solid production mix, and long-life, low-decline assets support its durable payouts. These assets help it deliver solid cash flows and offer operational flexibility and stability even in fluctuating commodity prices. Further, higher production from its zero-decline, high-value synthetic crude oil operations ensures consistent cash flows while keeping its reserve replacement costs low.
CNQ’s significant inventory of low-capital projects and strategic acquisitions position it well to deliver solid financials. Moreover, its extensive undeveloped land bank will support large-scale drilling programs, driving its growth and profitability in the coming years. Overall, Canadian Natural Resources is well-positioned to continue rewarding investors through consistent dividend growth and delivering significant capital gains.
