Dividend stocks are an attractive investment for generating steady income and long-term growth. These companies pay regular cash, which can provide support for near-term financial needs. Moreover, investors can reinvest dividends to gradually grow their holdings and benefit from compounding returns in the long run.
However, choosing the right dividend stocks is important. Canadian stocks that consistently pay and raise their dividends could be a solid addition to your portfolio. These are large-cap companies with strong fundamentals, resilient earnings base, strong balance sheets, and dependable cash flows. They can maintain dividend payouts during challenging market conditions and could deliver decent capital gains over time.
Against this background, here are the top dividend stocks every investor should own.
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Dividend stocks #1: Enbridge
The first dividend stock on this list is Enbridge (TSX:ENB), which offers a high and sustainable yield and a resilient payout. The energy infrastructure company has been consistently paying dividends for over seven decades. Moreover, it continuously raised its dividend for 31 consecutive years. Its ability to pay and increase its dividends in all economic situations makes it a no-brainer income stock. In addition, this energy infrastructure company pays an attractive yield of about 5.9%.
Enbridge’s strong financials and growth prospects indicate the company will continue to increase its dividend over the long term. It generates a significant portion of its earnings from regulated assets and long-term contracts, which help stabilize earnings by reducing exposure to short-term commodity price swings. Moreover, 80% of its earnings before interest, taxes, depreciation, and amortization (EBITDA) is also inflation-protected, helping preserve cash flow over time.
Its low-risk operating structure, diversified revenues, extensive pipeline network, high asset utilization, and a growing utility and renewable assets portfolio augur well for growth. It also has a sustainable payout ratio of 60% to 70% of distributable cash flow. Overall, Enbridge is a top Canadian dividend stock every investor should own.
Dividend stocks #2: Canadian Natural Resources
Canadian Natural Resources (TSX:CNQ) is a compelling dividend stock every investor should own. This Canadian oil and gas company has an impressive record of rewarding shareholders, including 25 consecutive years of dividend growth. The payouts highlight management’s commitment to returning capital and the durability of its business model.
Driving Canadian Natural’s dividend is its portfolio of large, low-risk, high-value reserves. Its long-life, low-decline assets enable the company to generate steady production and cash flow across a range of commodity price environments. This stability, combined with a strong balance sheet, supports the company’s ability to continue paying and increasing dividends even during challenging market cycles.
The company also benefits from its diversified asset base and highly efficient operations. Many of its projects require relatively low maintenance capital and have attractive breakeven costs, allowing Canadian Natural to generate consistent earnings. This operational strength provides a solid foundation for steady payouts.
Canadian Natural holds a significant inventory of undeveloped land and capital-efficient projects. This gives the company a long runway for future growth. In addition, its focus on acquisitions further strengthens its resource base and enhances its ability to expand over time.
Overall, CNQ offers a high yield of 4.8% and is a top dividend stock to buy and hold for worry-free income.
