Investing in high-quality dividend stocks with durable payouts can be one of the simplest ways to generate effortless earnings. Since these Canadian stocks are backed by fundamentally strong businesses, growing cash flows, and resilient payouts, they consistently increase their dividends and generate steady passive income, implying they help you earn while you sleep.
With this background, here are three Canadian stocks with the ability to pay and increase their dividends over time.
Image source: Getty Images
Enbridge
Enbridge (TSX:ENB) is a compelling investment for investors seeking steady, effortless income from their portfolios. This leading North American energy infrastructure company has an impressive track record of dividend payments that stretches back 70 years. Moreover, it has increased its dividend for 30 consecutive years, reflecting the resiliency of its payouts.
Furthermore, it offers a reliable and high yield of 5.83%, making it an attractive option for those looking to boost their cash flow.
But it’s not just about the high yield. Enbridge’s dividend is supported by a solid business model anchored by long-term contracts, diversified assets, and low-risk commercial arrangements. This structure enables it to generate steady earnings and distributable cash flows, supporting higher dividend payments.
Enbridge is also expanding into renewable energy and utility-like infrastructure, which enhances both stability and growth potential. Strategic acquisitions and a pipeline of secured multi-billion-dollar capital projects are also expected to drive future earnings and cash flow growth. All of these will help Enbridge to consistently deliver higher cash to its shareholders.
Telus
Telus (TSX:T) could be another valuable addition to your portfolio for effortless earnings. It is known for rewarding shareholders with higher dividend distributions and also offers attractive yields.
Canada’s leading wireless service provider has increased its distribution 27 times since 2011 through its multi-year dividend-growth program. Looking ahead, the expected moderation in capital expenditures, its ability to increase earnings and free cash flow, and its sustainable payout ratio will help it to return higher cash.
Telus is targeting 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. Moreover, Telus stock also offers a high yield of 7.4%.
The Canadian communication company is diversifying its revenue base, which will help generate incremental sales and add stability to its operations. 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 in enhancing the coverage and reliability of its network through spectrum acquisitions and infrastructure upgrades, which will drive growth in its user base and earnings.
Canadian Utilities
Canadian Utilities (TSX:CU) is a no-brainer dividend stock that can help you start a growing stream of passive income. This utility company operates a defensive business model led by rate-regulated cash flows. The predictable earnings stream enables Canadian Utilities to increase its dividends and maintain durable payouts.
This leading utility company has increased its dividends for an uninterrupted 52 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 4.8%.
Canadian Utilities’s high-quality assets will enable it to continue generating steady, low-risk earnings, supporting increased dividend payments. Its ongoing investments in expanding its regulated asset base will further drive its low-risk earnings, enabling it to return higher cash to its shareholders. Additionally, its contracted infrastructure assets will likely boost future growth and support higher dividends over time.
