When it comes to long-term investing, there’s no question that some of the best Canadian companies to buy and hold are dividend growth stocks. Not only do dividend growth stocks put cash in your pocket every quarter (or even every month), but they also tend to be the most reliable and resilient companies on the market.
There are plenty of reasons why dividend growth stocks are ideal long-term investments. However, the most significant is due to the consistent years of dividend increases.
While high-yield stocks can be tempting, it’s the companies that steadily raise their payouts each year that usually deliver the best results over time.
Every time a stock increases its dividend, your income grows. Furthermore, when you reinvest those dividends, the compounding effect becomes even stronger. That’s how a modest investment in a dependable Canadian dividend growth stock can quietly snowball into years or even decades of significant returns.
What really sets high-quality dividend growth stocks apart, though, is that they don’t just hand over profits to shareholders. These companies are also reinvesting heavily in their businesses.
It’s those reinvestments of funds that allow these companies to keep expanding operations and boosting earnings, which leads to more dividend growth down the road.
Not to mention, for a company to pay a dividend year after year, and keep raising it, it has to have reliable operations and durable profitability behind it.
So, if you’re looking for high-quality dividend growth stocks to buy now and hold for years, here are three of the best on the TSX.
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One of the best dividend growth stocks Canadian investors can buy now
If you’re looking for a high-quality Canadian dividend stock that can provide years of growth in your portfolio, there’s no question that CT REIT (TSX: CRT.UN) is one of the best you can consider.
What makes CT REIT such a high-quality and reliable investment is that it’s backed by Canadian Tire, which owns the majority of its shares and accounts for over 90% of its rental revenue. Therefore, CT REIT has a unique stability that’s almost unmatched in the real estate sector.
Having such a strong primary tenant not only ensures reliable cash flow but also gives CT REIT long-term visibility into its future earnings, which is why it’s one of the best dividend growth stocks Canadian investors can buy.
For example, since going public just over a decade ago, CT REIT’s dividend has increased every single year from $0.65/share annually to more than $0.94/share today.
Furthermore, CT REIT returns cash to investors monthly. So if you’re looking for a high-quality dividend growth stock to buy now, CT REIT currently offers a yield of 5.8%.
Two of the most reliable companies on the TSX
In addition to CT REIT, two more of the best and most reliable dividend growth stocks that Canadian investors can buy now are Enbridge (TSX: ENB) and Emera (TSX: EMA).
Enbridge and Emera are two of the most defensive and reliable stocks on the TSX. And unsurprisingly, they also have two of the longest dividend growth streaks in Canada.
Enbridge, for example, operates one of the largest energy infrastructure networks in North America, transporting a massive portion of the continent’s oil and natural gas every single day. Its scale and importance to the energy supply chain give it a level of reliability that few businesses can match.
Energy infrastructure also comes with some of the highest barriers to entry of any industry. The cost, regulatory approvals, and time required to build new pipelines make it virtually impossible for new competitors to emerge. That makes Enbridge’s existing network of pipelines, storage, and related assets incredibly valuable.
Meanwhile, Emera is another defensive stock that has proven its ability to reward patient investors with consistent dividend growth. As a regulated utility, it provides electricity and natural gas to millions of customers across Canada, the U.S., and the Caribbean.
Therefore, because both Enbridge and Emera are so defensive and robust, they are some of the best dividend growth stocks Canadian investors can buy.
So, if you’ve got cash you’re looking to put to work, Enbridge’s dividend yield is currently sitting at roughly 5.9%, while Emera offers a yield of 4.4%, making now an excellent time to gain exposure.
