Several Canadian stocks pay dividends. However, only a few dividend-paying stocks have the potential to keep paying and growing their distributions year after year. These TSX stocks have solid fundamentals, and many of them are large-cap firms with resilient business models that generate consistent earnings and robust free cash flow, supporting their payouts.
Against this background, here are three rock-solid dividend stocks I’d happily own through at least 2035.
Source: Getty Images
Rock-solid dividend stock #1: TC Energy
TC Energy (TSX:TRP) is a top Canadian dividend stock I’d happily own for the next decade for generating worry-free passive income. This energy infrastructure company transports natural gas and holds strategic, low-risk investments in power generation. Its vast North American pipeline network connects leading gas supplies to high-demand markets across Canada, the U.S., and Mexico, ensuring consistently high utilization of its system.
Roughly 97% of TC Energy’s earnings come from regulated or take-or-pay contracts, insulating it from commodity price swings and providing steady cash flow. This financial stability has enabled the company to consistently increase its dividend for 25 consecutive years. It currently pays $0.85 per share in quarterly dividends and has the potential to increase further in the coming years.
TC Energy’s management targets 3-5% annual dividend growth, supported by $6-$7 billion in capital projects, which will expand its contracted and regulated asset base. Further, the rising global energy demand, LNG expansion, and the shift toward cleaner energy provide a solid base for future growth. In short, TC Energy is a dependable income stock and offers a decent yield of 4.7%.
Rock-solid dividend stock #2: Canadian Natural Resources
Canadian Natural Resources (TSX:CNQ) is one of the top dividend stocks to buy and hold for the next decade. This oil and gas company has raised its dividend for 25 years in a row. Further, CNQ’s dividend grew at a compound annual growth rate (CAGR) of 21% during that period. Its payouts are driven by high-quality assets and a balanced production mix that delivers consistent cash flow through volatile commodity cycles.
The company’s long-life, low-decline reserves and efficient operations keep profitability strong, ensuring the sustainability of future payouts. Further, CNQ’s portfolio of low-risk, conventional projects that are quick to execute and require low capital augur well for growth.
Moreover, Canadian Natural’s vast undeveloped land base provides years of drilling potential, strengthening its growth outlook. Overall, its solid asset base, operational discipline, and a high dividend-growth rate make it a compelling passive income stock to buy and hold. It pays a quarterly dividend of $0.588 per share, reflecting a high yield of 5.5%.
Rock-solid dividend stock #3: Telus
Telus (TSX:T) is an attractive dividend stock to buy and hold for the next 10 years. This Canadian telecom leader has a history of consistently paying and growing its dividends through the multi-year dividend-growth program.
Notably, Telus has paid over $23 billion in dividends since 2004. Recently, Telus extended its dividend-growth program once again, aiming for annual increases of 3% to 8% through 2028. Its current quarterly dividend of $0.416 per share translates into a high yield of 7.8%.
Telus’s payouts are supported by its ability to consistently deliver profitable growth. Also, it maintains a sustainable payout ratio of 60-75% of free cash flow.
Its robust network infrastructure, bundled offerings, and expansion of the TELUS PureFibre network support customer retention and keep churn rate low. Also, its focus on acquiring margin-accretive customers augurs well for future earnings growth.
Telus is gaining momentum in healthcare, smart home technology, and digital services. These businesses diversify Telus’s offerings and will likely support future growth. The company’s focus on efficiency, debt reduction, and monetizing non-core assets further strengthens its financial footing. With capital spending set to ease, Telus anticipates rising free cash flow, which will drive future dividend growth.
