Canadian investors seeking a reliable source of passive income could consider investing in dividend stocks. While not all the dividend-paying stocks are reliable or guarantee regular payouts, some Canadian stocks have consistently delivered and even increased their payouts year after year. These are large, well-established Canadian companies backed by strong fundamentals and a stable earnings base, often referred to as blue-chip stocks.
Against this background, here are three blue-chip dividend stocks every Canadian should own for reliable and worry-free passive income.
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Blue-chip dividend stock #1
Fortis (TSX:FTS) is an attractive blue-chip dividend stock every Canadian should own for regular income. This utility company operates a rate-regulated business, generating predictable cash flows, regardless of market conditions. Additionally, it focuses on energy transmission and distribution, which reduces exposure to risks associated with power generation and fluctuations in commodity prices.
Thanks to its defensive business model and growing cash flow, Fortis has consistently paid and increased its quarterly dividends. To date, Fortis has consistently raised its dividend payments for 52 years, making it a compelling dividend stock to own for years. Currently, FTS offers a yield of about 3.5%.
The utility giant is well-positioned to keep increasing its dividend in the coming years, backed by its resilient earnings and growing rate base. Fortis’s $28.8 billion capital plan will enable the company to expand its regulated asset base and strengthen its low-risk earnings. Management projects the company’s rate base to expand at a compound annual growth rate (CAGR) of 7% through 2030. This will support steady earnings growth and drive a 4% to 6% increase in dividends during the same period.
Furthermore, Fortis is poised to benefit from the rising electricity demand from data centres, mining, and manufacturing industries, enabling it to deliver strong growth ahead.
Blue-chip dividend stock #2
TC Energy (TSX:TRP) is another blue-chip Canadian dividend stock to consider now for worry-free passive income. The energy infrastructure company’s extensive natural gas pipeline network connects major gas-producing regions to high-demand markets, ensuring strong and consistent system utilization, supporting its cash flow.
Moreover, TC Energy also benefits from a diversified power generation portfolio. This balanced energy mix adds resilience to its business model and positions the company to take advantage of growth opportunities in the global shift toward cleaner energy.
Notably, the majority of TC Energy’s earnings come from regulated or take-or-pay contracts, insulating it from commodity price swings. The regulated and contractual structure ensures steady cash flow and adds stability, helping the company to consistently increase its dividend. TRP has raised its dividend for 25 consecutive years. It currently pays $0.85 per share in quarterly dividends, offering a decent yield of over 4.8%.
The company’s multi-billion-dollar capital projects will expand its contracted and regulated asset base, supporting higher dividend payments in the future. TC Energy’s management targets 3-5% annual dividend growth in the coming years. Furthermore, the rising global energy demand, LNG expansion, and the shift toward cleaner energy sources provide a solid foundation for future growth.
Blue-chip dividend stock #3
Canadian Natural Resources (TSX:CNQ) is another top dividend stock to own for the long term. This oil and gas producer has increased its dividend for 25 consecutive years. Further, CNQ’s dividend grew at a CAGR of 21% during that period. It pays a quarterly dividend of $0.588 per share, reflecting a high yield of 5.3%.
The company’s resilient and growing payouts are driven by high-quality assets and a balanced production mix that delivers consistent cash flow through commodity cycles. Beyond dividends, CNQ has also delivered solid capital gains. Over the past five years, the stock has grown at a CAGR of over 39%, delivering overall capital gains of more than 418%.
Thanks to its long-life, low-decline reserves, operational discipline, and strong profitability, the company will be able to sustain future payouts. Furthermore, CNQ’s portfolio of low-risk, conventional projects that are quick to execute and require minimal capital bodes well for growth. Moreover, Canadian Natural’s vast undeveloped land base provides years of drilling potential, further strengthening its growth story, enabling it to drive higher payouts.
