Investing in top TSX dividend stocks can help generate steady passive income for decades. When searching for the best dividend stocks, look for fundamentally solid companies with the ability to weather economic downturns. Moreover, add companies with a growing earnings base, resilient cash flow, and a track record of solid payouts. These TSX stocks remain committed to rewarding investors with consistent dividends in the future.
With that in the background, here are three stocks to buy and hold forever for steady passive income.
Canadian Natural Resources stock
Canadian Natural Resources (TSX:CNQ) is a compelling TSX stock known for its relatively resilient business model, growing earnings base, and solid dividend payment history. Investors should note that this energy giant has increased its dividend at a compound annual growth rate (CAGR) of 21% for the last 25 years. Moreover, it offers an attractive yield of 5.4% near current levels.
Besides offering uninterrupted dividend growth, the oil and gas producer has delivered stellar capital gains of approximately 284% over the last five years.
Canadian Natural Resources’s solid production mix, long-life and low-decline assets, efficient operations, and disciplined capital allocation will continue to drive its distributable cash flow in the future. Further, higher production from its zero-decline, high-value synthetic crude oil operations will add stability to its operations and keep its reserve replacement costs low.
The company will also benefit from its extensive undeveloped land bank, low-capital projects, and opportunistic acquisitions, which will support its future growth and payouts.
Fortis stock
Passive-income investors should add a few utility stocks to their portfolios. These companies have a defensive business model, benefiting from their regulated operations. This business structure helps generate resilient earnings, enabling them to consistently pay and increase their dividends.
One such reliable utility giant is Fortis (TSX:FTS), which generates most of its earnings from regulated utility operations and remains insulated from market volatility. It focuses on energy transmission and distribution that carries lower operational risk. Thanks to resilient earnings and a growing rate base, Fortis has consistently rewarded investors with uninterrupted dividend growth for over five decades (51 consecutive years, to be precise). Moreover, it offers a decent yield of 3.8% near the current market price.
The company is well-positioned to continue delivering consistent earnings, backed by a diversified portfolio of regulated assets across North America. Fortis anticipates its rate base to increase at a compound annual growth rate of 6.5% through 2029. This will expand its low-risk earnings base and drive annual dividend increases of 4% to 6%.
Scotiabank stock
Canada’s top banking stocks are reliable sources of passive income as they have a stellar history of consistently paying dividends. Moreover, they maintain a sustainable payout ratio. Within the banking space, Scotiabank (TSX:BNS) appears attractive due to its high yield, focus on returning higher cash to shareholders, and robust history of dividend payments.
This financial services company has been paying dividends since 183. Moreover, Scotiabank has increased its dividend by an average of 5% annually since 2014, reflecting its commitment to rewarding investors through higher payouts. Currently, Scotiabank offers an attractive annual yield of about 6%.
Scotiabank maintains strong asset quality and operational efficiency, which supports its profitability and ensures consistent dividend payouts. The bank’s focus on high-growth banking markets supports its financials. Moreover, Scotiabank’s diversified revenue model, growing wealth management and capital markets business, ability to expand its loan and deposit base, and focus on improving operational efficiency will drive its future earnings, supporting its payouts.
