Investing in dividend-paying stocks will strengthen your portfolio’s capacity to generate reliable passive income. Some companies stand out for their solid fundamentals and long track records of not only paying dividends, but steadily increasing them over time. Backed by solid earnings and sustainable payout ratios, these TSX stocks are well-positioned to continue rewarding shareholders for years to come.
With that in mind, here are three Canadian dividend stocks worth considering now for dependable, worry-free passive income.
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Passive income stock #1: Fortis
Fortis (TSX: FTS) is a dependable dividend stock to generate years of passive income. This electric utility company, focused on transmission and distribution, generates predictable cash flows under rate-regulated frameworks that help insulate earnings from economic volatility. This defensive structure has enabled Fortis to raise its dividend for 52 consecutive years, including a 4.1% increase announced last year. It currently offers a quarterly distribution of $0.64 per share, yielding over 3.3%.
Fortis plans to invest $28.8 billion in regulated utility projects over the next five years, expanding its rate base from approximately $42 billion in 2025 to an estimated $58 billion by 2030. This growth will drive its earnings, supporting its payouts.
Fortis projects its annual dividend to increase by 4% to 6% through 2030. In addition, rising electricity demand from manufacturing and data centres, along with ongoing portfolio optimization through the divestment of non-core assets, augur well for future growth.
Overall, Fortis’ solid dividend growth history and visibility into future payouts make it a dependable stock for generating passive income for years.
Passive income stock #2: TC Energy
TC Energy (TSX: TRP) is a reliable passive income stock to buy now. The energy infrastructure company generates about 98% of its EBITDA from regulated assets and long-term, take-or-pay contracts. This operating structure shields its cash flow from commodity price volatility and enables it to consistently pay and increase its dividend.
It recently lifted its dividend by 3.2%, marking 26 consecutive years of annual increases. Moreover, TC Energy is well-positioned to sustain its dividend growth streak in the coming years.
Looking ahead, its extensive pipeline network, which links North America’s lowest-cost natural gas basins to key demand centres, is likely to witness high asset utilization, supporting its cash flow. Further, the company’s diversification into clean energy power assets and focus on contracted, predictable cash flow augur well for growth.
TC Energy’s multi-billion-dollar capital program is focused on long-duration projects designed to deliver attractive, low-risk returns. At the same time, growing energy demand from electrification, data centre expansion, and coal-to-gas conversions will likely support its growth in the coming years. It is offering a yield of over 4.1% and plans to increase its dividend by 3% to 5% in the long run.
Passive income stock #3: Toronto-Dominion Bank
Toronto-Dominion Bank (TSX: TD) is an attractive dividend stock to buy for steady passive income. This leading Canadian bank has paid dividends for 169 consecutive years, reflecting the durability of its business payouts across multiple economic cycles, recessions, and financial crises. Since 2016, the bank has increased its dividend at a compound annual growth rate of 8%, rewarding shareholders with higher cash.
TD appears well-positioned to sustain both its dividend payments and growth trajectory. The bank benefits from a diversified revenue base, which reduces earnings volatility and provides stability even when certain segments face headwinds. Continued expansion in loans and deposits, combined with disciplined cost management, supports steady profitability. In addition, its strong balance sheet further enhances its capacity to weather economic uncertainty while maintaining shareholder distributions.
Strategic acquisitions also play an important role in TD’s long-term outlook. By expanding its geographic footprint and enhancing its product offerings, the bank strengthens its competitive position and adds incremental earnings over time. With a conservative target payout ratio of 40% to 50%, TD is well-positioned to sustain its dividends in the coming years.
