Investing in dividend-paying stocks is one of the reliable ways to earn passive income. Moreover, selecting fundamentally strong stocks with growing earnings bases and resilient dividend payouts ensures steady income, regardless of economic conditions. While several TSX stocks offer resilient payouts, I’ll focus on those that are likely to pay and increase their dividends, returning significant cash to their shareholders over the next 20 years.
Against this background, here are two Canadian dividend stocks to buy and hold for a growing passive income stream over the next 20 years.
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Enbridge stock
Enbridge (TSX:ENB) is one of the top dividend stocks to hold for the next 20 years. Its diversified energy infrastructure footprint, low-risk utility-like business model, and multi-billion-dollar secured capital projects provide it the financial flexibility to return significant cash to its shareholders in the form of dividends.
ENB stock increased its dividend for 30 consecutive years and has distributed $35 billion in dividends in the past five years.
Looking forward, the company’s resilient business model, supported by long-term contracts, a regulated cost-of-service framework, and minimal exposure to commodity price fluctuations will enable it to generate steady cash flows.
Enbridge is investing in high-quality growth opportunities across both traditional and emerging energy sectors. Further, its recent strategic acquisitions, ongoing projects development, and efficiency improvements are expected to boost its long-term financial performance. Moreover, its focus on regulated assets, low-capital-intensity growth projects, and strengthening of the balance sheet bodes well for future growth.
Enbridge is expanding its footprint in lower-carbon platforms. This includes supporting LNG exports, developing offshore gas infrastructure, and tapping into electrification trends across North America, particularly the growth of data centres, where Enbridge can deliver integrated natural gas and renewable energy solutions.
In short, Enbridge is well-positioned to generate solid distributable cash flows, which will drive future payouts. ENB stock expects to return $40 to $45 billion in dividends in the next five years. Moreover, it targets annual dividend increases of 5% in the long term. Currently, ENB offers a high yield of about 5.9%.
Fortis stock
Fortis (TSX:FTS) is another top Canadian dividend stock to buy and hold for the next 20 years. Its proven track record of consistent dividend growth, reliable payouts, and a low-risk rate-regulated business model make it a top stock for generating worry-free income for decades.
Notably, about 99% of its earnings come from regulated utility operations. This means Fortis generates low-risk earnings regardless of market conditions. Moreover, most of Fortis’s operations, approximately 93%, are focused on energy transmission and distribution rather than generation. This business structure reduces exposure to fluctuating commodity prices and the operational risks tied to power production. As a result, Fortis’s earnings remain steady, enabling it to return higher cash to its shareholders.
FTS stock has increased its dividend for 51 consecutive years, reflecting its ability to generate predictable cash flows and commitment to rewarding shareholders. Backed by regulated cash flows, Fortis plans to continue this trend, targeting annual dividend growth of 4% to 6% through at least 2029.
Supporting this growth is Fortis’s $26 billion five-year capital investment plan, which will boost the company’s rate base to $53 billion in 2029 from $39 billion in 2024. The expanding rate base will drive earnings and distributions.
Looking beyond 2029, Fortis is well-positioned to tap into additional growth opportunities. These include expanding electric transmission infrastructure in the U.S., enhancing grid resilience, and developing cleaner energy solutions, such as renewable and liquefied natural gas infrastructure.
In summary, Fortis is a reliable stock for investors seeking steady income for decades.
