Top Canadian dividend stocks are reliable investments to start a passive-income stream. Moreover, many of these TSX stocks have consistently paid and raised their dividends for years, offering resilient payouts. These companies have never cut their dividends regardless of economic situations, making them rock-solid investments for steady passive income.
Against his backdrop, here are three fundamentally strong stocks with rock-solid payouts.
Fortis
Speaking of rock-solid Canadian dividend stocks, Fortis (TSX:FTS) tops my mind. This electric and gas utility company has increased its dividends for 51 consecutive years, thanks to its defensive business model and regulated cash flows.
Notably, most of Fortis’s earnings stem from rate-regulated utility assets, which provide predictable and growing cash flow, supporting its payouts. Furthermore, Fortis primarily focuses on energy transmission and distribution, areas that are largely insulated from the volatility of power generation. This adds further resilience to its cash flows and payouts.
Looking ahead, Fortis’s multi-billion-dollar capital investment program is expected to drive its rate base and earnings. Its rate base is projected to rise by approximately 6.5% annually through 2029, which is likely to translate into stronger earnings and continued growth in dividends in the range of 4-6% annually. Furthermore, the growing demand for electricity, driven in part by energy-intensive industries such as manufacturing and data centres, provides an additional tailwind for future dividend growth.
Enbridge
Canadian investors seeking rock-solid passive income can add Enbridge (TSX:ENB). The energy infrastructure company’s resilient business model and diversified revenue base drive its earnings and distributable cash flow (DCF), supporting its dividend payments.
Enbridge has been uninterruptedly paying its dividend since going public in 1953. Moreover, it has raised its annual dividend distributions for 30 consecutive years. Over the next five years, Enbridge anticipates distributing $40-$45 billion in dividends to its shareholders, while targeting mid-single-digit dividend growth. The company also targets a sustainable payout ratio of 60-70% of cash flow and currently offers a healthy yield of 5.5%.
Its extensive network of liquid pipelines and energy infrastructure will likely experience high utilization, driving its financial performance and payouts. Moreover, long-term contracts and low-risk commercial arrangements will enable Enbridge to generate predictable cash flow across all market situations, supporting its quarterly distributions. Additionally, Enbridge’s expanding footprint in the utilities and renewable energy sectors positions it well to capitalize on the growing demand for energy.
Telus
Telus (TSX:T) is another rock-solid dividend stock for steady passive income. It has a strong dividend payment history and offers a high and sustainable yield. Also, the Canadian communications giant offers visibility over future dividend growth, making it a compelling income stock.
Notably, this telecom company has raised its dividend 27 times over the last 14 years. In addition, it targets a sustainable payout ratio of 60-75% of free cash flow.
Telus’s solid financials and future growth strategy provide a solid foundation for continued dividend growth. Its investments in PureFibre and 5G networks give it a competitive edge in both broadband and wireless services, supporting subscriber growth and maintaining a low customer churn rate. Telus is focused on attracting margin-accretive customers, improving operational efficiency, and enhancing profitability. It also expects a moderation in capital spending in the coming years, which will further strengthen its ability to fund future dividend increases.
Beyond its traditional telecom operations, Telus has seen notable traction in high-growth areas, such as the Internet of Things, and Telus Health will likely support its financials and payouts. Looking ahead, Telus plans to raise dividends by 3-8% annually through 2028. Moreover, it is offering a compelling yield of 7.6% near the current market price.
