Investors aiming to create a stress-free income source for a lifetime may consider investing in high-quality dividend stocks. These stocks offer income, stability, and potential for capital appreciation over time.
Of course, it’s important to remember that no stock can promise a guaranteed payout forever. However, Canadian companies with solid fundamentals, sustainable payout ratios, consistent earnings growth, and a strong history of rewarding shareholders through regular dividends are reliable choices. These TSX stocks have the financial strength and resilience to maintain and gradually increase their dividends, making them valuable long-term holdings for anyone seeking passive income.
With this in mind, here are two dividend stocks that can be relied upon for lifetime income.
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Canadian Natural Resources
Canadian Natural Resources (TSX: CNQ) is a reliable dividend stock to buy and hold for lifetime income. This oil and gas producer has never cut or suspended its dividend. Instead, it has increased its dividend for 25 consecutive years. Over that period, its dividend grew at a compound annual growth rate (CAGR) of 21%. CNQ’s resilient and growing dividends reflect management’s commitment to shareholders and the strength of its diversified portfolio of long-life, low-decline assets.
Beyond dividends, CNQ has also rewarded investors with solid capital gains. Over the past five years, the stock has grown at a CAGR of approximately 37%, delivering overall capital gains of more than 380%.
Looking ahead, CNQ appears well-positioned to keep rewarding investors. Its long-life, low-decline assets and balanced production mix of crude oil, natural gas, and NGLs provide flexibility in capital spending and resilience through shifting commodity cycles. Further, its international assets in the U.K. North Sea and Offshore Africa add stability and broaden its global reach.
Additionally, Canadian Natural’s portfolio of low-risk, quick-to-develop conventional projects offers solid growth opportunities ahead. These projects require relatively little capital and can generate strong returns when market conditions are favourable. On top of that, CNQ’s large undeveloped land base supports repeatable drilling programs, giving it room to grow in the future.
In short, CNQ remains a compelling stock to buy and hold for lifetime income and steady wealth creation.
Hydro One
Hydro One (TSX: H) is another top dividend stock to buy now for a lifetime of income. This leading electric utility company generates stable and growing cash flows through its rate-regulated assets. Moreover, it is primarily into electric transmission and local distribution with no power generation or exposure to commodity prices. This adds stability to its operations and drives its cash flows.
Thanks to its defensive business model and low-risk earnings base, Hydro One has consistently increased its dividend since 2016. Hydro One’s dividend grew at a CAGR of 5% between 2016 and 2022, and then accelerated to 6% annually from 2022 onward.
Looking ahead, Hydro One’s expanding rate base is expected to drive both earnings and dividends higher. The company projects its rate base to grow from $23.6 billion in 2022 to $32.1 billion by 2027, representing a 6% CAGR. That expansion is forecasted to translate into earnings growth of 6-8% annually, which, in turn, should support continued dividend increases at roughly 6% per year.
Overall, Hydro One’s regulated assets, a self-funded organic growth plan, and strong cash generation position it well to pay and increase its dividend. Further, its focus on upgrading and modernizing aging infrastructure augurs well for growth.
