Often, people put off investing as they fear parting ways with cash for a long time. If the fear of staying away from cash for the long term is keeping you from investing in stocks, consider dividend stocks. They will divide your surplus amount into small payouts of 5-6% of your invested amount while keeping your principal amount invested. And this payout could run into decades.
Top dividend stocks for long-term returns
The $5,000 bonus you may have received in 2025 would vanish if you spend it on discretionary spending. However, sacrificing this spend and investing it in CT REIT (TSX:CRT.UN) and Canadian Natural Resources (TSX:CNQ) can give you more than $198.
A $2,500 investment in each of the two stocks will buy 153 units of CT REIT and 55 shares of CNQ. If we take the 2025 dividends, the annual dividend income on these shares would have totaled $198, giving a 4% yield on a $5,000 investment.
| Stock | Share Price | Dividend per Share | Dividend income in 2025 | 10 year estimated Dividend CAGR | Estimated Dividend in 2035 | Dividend income in 2035 |
| CT REIT | $16.30 | $0.95 | $145.35 | 3% | $1.28 | $195.84 |
| Canadian Natural Resources | $45.07 | $2.35 | $52.65 | 8% | $5.07 | $278.85 |
| Total | $198.00 | $474.69 | ||||
| Annual Yield | 4.0% | 10-year estimated Dividend CAGR |
This might not look attractive, and you might be better off investing in high-yield dividend stocks. However, these stocks can grow their dividend at a compounded annual growth rate (CAGR) of 3% and 8%, respectively. In a decade from now, your annual payout will increase to $474.7, which is a 9.5% yield on the $5,000 investment. In 13 years, these stocks could pay $5,300 in cumulative dividends.
This is a conservative dividend growth estimate. These stocks can grow their dividends at a higher rate.
CT REIT
CT REIT has an advantage over other real estate investment trusts (REITs) because of its parent, Canadian Tire. Having the first right to acquire or develop a store for Canadian Tire ensures occupancy. Also, it doesn’t have to compete with other REITs nor spend much on marketing or brokerage. It doesn’t have significant mortgage or construction loans. The only debt it has is unsecured debentures, reducing the credit risk.
Canadian Tire, being the largest tenant, routes its rental expenses to the REIT. The retailer, being the REIT’s largest shareholder, gets a significant portion of that rent back as dividends. CT REIT can continue growing dividends from the rental income it earns from new stores and an annual increase in leases.
The REIT has reduced the dividend-payout ratio to 73% in the nine months of 2025, which means it has the flexibility to keep paying dividends and increase them if the management deems fit. Since it is a REIT, it has to distribute most of its income to enjoy the tax-free status of the trust. You can also invest in CT REIT’s dividend-reinvestment plan (DRIP) to compound returns. With DRIP, your dividend could grow faster than 3%.
Canadian Natural Resources stock
Canadian Natural Resources can also give a high dividend growth of more than 8%. I took a conservative estimate as the oil and gas producer increased its debt to $17 billion to acquire new oil reserves. It is focused on reducing this debt in the coming three to five years and bringing it to the manageable $12-$15 billion range.
The company has a cost advantage with a breakeven oil price of mid-$40s/barrel after incorporating maintenance and dividends. When the oil price is high, the company increases free cash flow (FCF) by increasing production. When the oil price falls, the company increases its free cash flow by reducing debt.
It increased dividends by 9.9% in 2025, even when the oil price fell to $65 from $75 in 2024. It used only 60% of its FCF because of higher net debt. It did so by increasing FCF through higher production and repaying debt. It will continue to reduce debt in the coming years to increase dividends as the oil price normalizes. Once the net debt falls below $12 billion, it will use 100% FCF on share buybacks and dividends, leaving scope for higher dividend growth in the future.
