Investing $5,000 in the smartest dividend stocks can help you earn a growing passive income stream across all market conditions. The payouts of these companies are supported by their fundamentally strong businesses, which generate resilient earnings and cash flows. Moreover, these Canadian companies have sustainable payout ratios.
In addition, these companies have remained committed to rewarding shareholders with consistent dividend growth, even during market turbulence or an economic slowdown, making them dependable investments for passive income year after year.
If you have $5,000 to invest, here are the smartest Canadian dividend stocks to buy right now.
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Smartest dividend stock #1: Fortis
Fortis (TSX: FTS) is one of the smartest dividend stocks to buy right now. The utility company, which primarily focuses on electricity transmission and distribution, has been increasing its dividends for more than five decades (52 years, to be precise). Fortis stock currently offers a quarterly dividend of $0.64 per share, yielding 3.2%.
The resilient payouts reflect the company’s rate-regulated structure, low-risk earnings, and predictable cash flows, enabling it to maintain reliable dividend payments and growth even during periods of market uncertainty.
Going forward, the company expects to increase its dividend by 4% to 6% each year, supported by its capital investments, driving its rate base. Notably, Fortis plans to invest $28.8 billion over the next five years, primarily in low-risk regulated utility infrastructure, which will expand its earnings and also limit execution risk.
These investments are expected to increase Fortis’s consolidated rate base to roughly $58 billion by 2030, further supporting earnings growth.
Fortis is also likely to benefit from rising electricity demand driven by manufacturing and data centres. Moreover, Fortis’s divestment of non-core assets will further strengthen its financial position, enabling the company to offer higher dividend income and steady growth.
Smartest dividend stock #2: Bank of Montreal
Bank of Montreal (TSX: BMO) is one of the smartest dividend stocks to buy now. The financial services giant has uninterruptedly paid dividends for 197 years. Moreover, over the past 15 years, BMO has grown its dividend by roughly 5.7% annually. The consistency of its payouts reflects its commitment to rewarding shareholders with higher payouts.
BMO has a diversified revenue base and is benefiting from strong client relationships. Ongoing efficiency initiatives will increase productivity and cushion its profitability, supporting higher dividend payments. In addition, the bank focuses on investing in technology and artificial intelligence (AI) to modernize operations and improve the customer experience, which augurs well for growth.
Further, its strong balance sheet and high-quality asset base will help the bank drive growth and continue to support its dividend payments.
Smartest dividend stock #3: Enbridge
Enbridge (TSX: ENB) is another top stock for dividend investors. It has paid dividends for more than seven decades and has increased them at an impressive 9% compound annual rate since 1995. Its solid distribution history reflects resilience across commodity cycles and economic downturns.
Enbridge operates a diversified business with most of its revenue stemming from regulated assets and long-term take-or-pay contracts. In addition, about 80% of Enbridge’s EBITDA is indexed to inflation. This operating structure provides predictable cash flows regardless of short-term fluctuations in oil or gas prices, driving distributable cash flow (DCF) and dividend payments.
Moreover, its extensive network of pipelines and energy infrastructure connects major supply and demand hubs across North America, keeping asset utilization high and demand steady.
With a targeted payout ratio of 60–70% of DCF, Enbridge aims to sustain dividends while delivering mid-single-digit growth in the years ahead. Currently, Enbridge stock yields about 5.2%.
