Canadian pensioners are searching for ways to get more income out of their hard-earned savings. One popular strategy involves owning top TSX dividend stocks inside a self-directed Tax-Free Savings Account (TFSA).
With markets near record highs and potential economic turbulence on the horizon, it makes sense to look for stocks with long histories of delivering reliable dividend growth supported by increases in revenue and cash flow.
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Enbridge
Enbridge (TSX:ENB) is a major player in the North American energy infrastructure sector. The company’s oil pipeline network moves about a third of the oil produced in Canada and the United States. Its extensive natural gas transmission assets carry about 20% of the natural gas used by American homes and businesses. In addition, Enbridge owns natural gas distribution utilities, an oil export terminal, renewable energy assets, and is a partner on the Woodfibre liquified natural gas (LNG) export facility being built on the coast of British Columbia.
With a current market capitalization near $145 billion, Enbridge is one of Canada’s largest companies and has the financial clout to make big strategic acquisitions to drive growth, while also being able to pursue big development projects.
For example, Enbridge spent US$14 billion in 2024 to buy three natural gas utilities in the United States. Natural gas demand is rising as gas-fired power plants are built to supply electricity to AI data centres. On the development side, Enbridge is working on a $35 billion secured capital program that includes investments across the asset portfolio.
Revenue growth from the new assets should boost cash flow enough to support steady dividend increases in the range of 3% to 5% per year over the medium term. Enbridge raised the dividend in each of the past 30 years. Investors who buy ENB stock at the current price can get a dividend yield of 5.6%.
Fortis
Fortis (TSX:FTS) is another Canadian utility company that has a great track record of dividend growth. The board has increased the dividend for 52 consecutive years and just raised the distribution by 4.1%.
Fortis owns natural gas distribution utilities, power generation facilities, and electricity transmission networks. These assets generate rate-regulated revenue, which means the cash flow from the businesses tends to be predictable and reliable. Power and fuel are essential products and services, so Fortis shouldn’t see a significant negative change to its revenue stream if the economy goes into a recession.
Fortis hasn’t made a large acquisition for several years, but it continues to expand its assets through organic projects. The current $28.8 billion capital program is expected to raise the rate base from $41.9 billion in 2025 to $57.9 billion in 2030. As the new assets are completed and go into service, the added revenue and earnings should provide the cash flow needed to deliver planned annual dividend growth of 4% to 6% over the next five years.
Investors who buy FTS stock at the current price can get a dividend yield of 3.5%.
The bottom line
Enbridge and Fortis pay good dividends that should continue to grow. If you have some cash to put to work in a portfolio focused on dividend income, these stocks deserve to be on your radar.
