Buying and holding a few high-quality dividend stocks enhances the income potential of your investment portfolio. Moreover, top dividend-paying companies are primarily the ones with resilient businesses and a growing earnings base, which in turn support regular dividend payments. Over time, these companies provide a steady income and have the potential to increase in value, offering attractive capital gains.
In this context, let’s explore three dividend stocks that you can consider investing $3,000 in and holding for the long term. These TSX-listed stocks have a solid record of reliable dividend payouts and strong underlying fundamentals, making them dependable choices for investors looking to build a stable income portfolio.
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Dividend stock #1
Fortis (TSX: FTS) is the top Canadian dividend stock to buy and hold forever. The utility company’s regulated assets and predictable cash flows position it well to consistently pay and increase its payouts even in uncertain market conditions. Further, its defensive business model adds stability to your portfolio.
Thanks to its low-risk earnings, Fortis has rewarded investors by increasing its dividend for 51 consecutive years. Moreover, the utility company will likely maintain its dividend growth streak in the coming years. Its $26 billion capital plan will expand its rate base and drive low-risk earnings. Management anticipates the company’s rate base to increase at a compound annual growth rate (CAGR) of 6.5% through 2029. This growth will support ongoing dividend increases, with projections calling for annual hikes of 4% to 6% over the next several years.
In short, Fortis is a reliable dividend stock to hold for decades. It offers a yield of 3.8%.
Dividend stock #2
Bank of Montreal (TSX: BMO) is another attractive dividend stock to consider now. The Canadian banking giant boasts the longest history of dividend payments on the TSX, making it one of the reliable income stocks.
Bank of Montreal has uninterruptedly distributed dividends for 196 years. Over the past 15 years, the bank has raised its dividend at a CAGR of more than 5%. The financial services giant’s payout history reflects its ability to generate high-quality earnings that support its payouts.
The financial services company’s diverse revenue streams, expanding loan and deposit base, strong credit quality, and focus on improving operational efficiency will likely drive its earnings, enabling it to continue to grow its dividends in the coming years. Besides resilient payouts, Bank of Montreal stock offers a high yield of 4.4%.
Dividend stock #3
Enbridge (TSX: ENB) is a compelling investment for those seeking consistent passive income for decades. With a history of over 70 years of dividend payments, Enbridge showcases a strong commitment to rewarding its shareholders. Moreover, Enbridge has increased its dividend at a CAGR of 9% over the past three decades and offers an attractive yield of 5.9%.
Its resilient payouts are supported by its diversified business model, which includes a vast network of liquid pipelines across North America. The high system utilization rate, long-term contracts, and strategies to mitigate commodity price exposure enable Enbridge to deliver solid earnings and distributable cash flow (DCF).
Besides the strength in its liquid pipelines business, Enbridge’s natural gas transmission operations are likely to benefit from higher demand, especially as data centres and industrial activity grow. Simultaneously, its gas distribution and storage segments will expand steadily due to customer growth and infrastructure upgrades.
Enbridge is also expanding its presence in the renewable energy sector, providing additional support to its cash flow and dividend payments. With these strengths, Enbridge remains a reliable long-term investment for income-focused investors.
