The TSX has several dividend payers, but not every Canadian stock consistently rewards its investors with regular payouts. Therefore, focusing on fundamentally strong companies with a resilient business model and a solid record of rewarding investors could help generate steady income for decades.
With that backdrop, here are three TSX dividend payers ready to reward investors now with their attractive yields and reliable sources of long-term passive income. These stocks have returned significant cash to their shareholders even during economic downturns. Moreover, they offer sustainable payouts.
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TC Energy
TC Energy (TSX:TRP) is one of the top TSX dividend payers, rewarding its investors with higher payments year after year. The energy infrastructure company has raised its dividend distributions for 25 consecutive years, which reflects its ability to generate resilient earnings and cash flows across commodity and economic cycles. Moreover, the company plans to grow its dividend by 3–5% annually in the long run and offers a healthy yield of around 4.9%.
TC Energy’s payouts are well-protected through its high-quality assets. Notably, most of its comparable earnings are derived from take-or-pay contracts or regulated cost-of-service frameworks. This contractual structure makes it relatively less exposed to commodity price fluctuations, adding stability to its financials, boosting cash flows, and driving dividend payouts.
The energy company will continue to benefit from its highly regulated and contracted assets, higher system utilization, and $28 billion secured capital projects. Moreover, the company is poised to capitalize on the growing energy demand with its new growth projects, which will support its growth and future payouts.
Telus
Telus (TSX:T) is another attractive TSX stock that has rewarded shareholders with higher dividend income through its multi-year dividend-growth program. Canada’s leading wireless service provider has increased its distribution 27 times since 2011. In addition, Telus stock offers a high yield of 7.5%.
Telus remains focused on rewarding its shareholders with higher dividends in the future, thanks to its ability to expand its earnings, moderation in capital expenditures, free cash flow expansion, and sustainable payout ratio. It targets annual dividend growth of 3% to 8% through 2028. Further, its dividend payout ratio is 60–75% of free cash flow, which is sustainable in the long run.
Telus is diversifying its revenue base, adding stability and generating incremental sales. In addition, Telus’s ability to expand its user base profitably, maintain a lower churn rate, and focus on reducing costs will drive earnings, supporting future payouts.
The telecom company will continue to benefit from its investments to enhance the coverage and reliability of its network through spectrum acquisitions and infrastructure upgrades. Overall, the firm is poised to deliver solid growth and reward investors.
Bank of Montreal
Bank of Montreal (TSX:BMO) is Canada’s longest-running dividend-paying company, making it one of the reliable dividend payers for generating regular passive income. This leading Canadian bank has distributed dividends for the last 196 years. Moreover, the bank has raised its dividend at a compounded annual growth rate (CAGR) of 5.4% over the past 15 years. The bank is well-positioned to continue to generate steady passive income for decades, owing to its ability to consistently increase its earnings.
Over the medium term, the bank’s earnings per share will likely increase by 7–10%, driving higher payouts. While its payouts are sustainable, it offers a high yield of 4.4%.
Bank of Montreal’s diverse revenue sources, growing loans and deposit base, strong credit performance, and improving efficiency position it well to deliver solid earnings and will support its future payouts.
