Top Canadian dividend stocks are reliable investments for worry-free passive income, with the potential to deliver decent capital gains. Moreover, companies that can consistently pay and grow their dividends are usually backed by strong fundamentals, resilient business models, and disciplined capital allocation. Over time, this mix of steady cash flow and earnings growth can translate into attractive long-term total returns with relatively lower volatility.
Against this background, here are two top dividend stocks for long-term returns.
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Top dividend stock #1: Fortis
Fortis (TSX: FTS) is a top dividend stock for investors focused on long-term returns and income stability. The regulated electric and gas utility company operates a defensive business model, generating low-risk earnings. Its rate-regulated assets provide visibility into revenues and cash flows, insulating Fortis from economic volatility.
Its predictable and growing cash flow has translated into solid shareholder returns. Fortis has increased its dividend for 52 consecutive years, making it one of Canada’s most reliable income-generating stocks.
Looking ahead, Fortis’s management intends to invest $28.8 billion to expand its regulated asset base, which is expected to grow at a compound annual rate of 7% through 2030. As the rate base expands, earnings should follow, providing the foundation for continued dividend increases. Based on this outlook, Fortis targets annual dividend growth of 4% to 6% through the end of the decade.
Structural demand trends further strengthen the company’s long-term prospects. Rising electricity consumption, driven by industrial expansion and the rapid growth of energy-intensive data centres, is creating sustained demand for utility infrastructure. In addition, ongoing investment in U.S. electric transmission networks, needed to support higher loads and integrate new energy resources, positions Fortis to benefit from grid expansion across key markets.
Overall, Fortis is well-positioned to deliver reliable income and decent capital gains over time.
Top dividend stock #2: Enbridge
Enbridge (TSX:ENB) is another top dividend stock for solid long-term returns. The energy infrastructure operates an extensive pipeline network connecting major demand and supply markets. This drives system utilization, supporting its cash flow.
Further, Enbridge’s cash flow is supported by a diversified revenue base and low-risk, long-term commercial agreements, many of which are regulated or structured as take-or-pay contracts. As a result, Enbridge has minimal exposure to commodity price fluctuations. In addition, the majority of its EBITDA benefits from built-in inflation protection.
This resilient operating model has enabled Enbridge to increase its dividend for 31 consecutive years. Moreover, it aims to pay out 60% to 70% of its distributable cash flow (DCF) as dividends, which is sustainable in the long term and helps the company retain sufficient capital to fund future growth.
Enbridge’s core pipeline business is expected to continue delivering steady growth, driven in part by higher system utilization. Moreover, the company is also positioning itself to benefit from emerging opportunities tied to AI-driven energy demand.
Notably, its renewable power portfolio is supported by attractive power purchase agreement pricing, declining supply costs, and favourable tax incentives. Importantly, these renewable projects are supported by long-term contracts with leading technology and data centre operators. This provides stability and will drive future cash flows.
Overall, Enbridge’s resilient business model, strong cash flow generation, and exposure to AI-driven tailwinds position the company well to sustain dividend growth and deliver solid long-term returns.
