Canadian investors are searching for good TSX dividend stocks to add to their self-directed Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) portfolio focused on income and total returns.
In a market that looks expensive, even as economic headwinds build, it makes sense to consider companies that have long track records of delivering reliable dividend growth.
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Fortis
Fortis (TSX:FTS) is one of those dividend stocks investors can buy and simply forget about for decades. The company has increased its dividend annually for the past 52 years and intends to boost the distribution by 4% to 6% annually through at least 2030.
Fortis is working on a $28.8 billion capital program that will raise the rate base from $42 billion in 2025 to nearly $58 billion in 2030. As the new assets are completed and go into service the resulting boost to cash flow should support the planned dividend hikes.
Fortis owns power generation utilities, electric transmission networks, and natural gas distribution utilities. These businesses generate steady and predictable rate-regulated revenue through the full economic cycle.
Looking ahead, Fortis has several additional capital projects under consideration that could get added to the development plan. At the same time, the company’s expertise in building and managing electrical grids puts it in a good position to participate in Canada’s plan to create a national power grid.
Fortis stock currently provides a dividend yield of 3.2%. This is lower than the dividend return investors can get from other TSX dividend names, but the reliability of the dividend growth and the long-term total returns make up for the smaller initial dividend yield.
Enbridge
Enbridge (TSX:ENB) is a giant in the North American energy infrastructure and natural gas utilities sectors. The company is best known for its oil pipeline network that moves about a third of the oil produced in Canada and the United States. On the gas side, Enbridge’s natural gas transmission and storage system transports roughly 20% of the natural gas used in the United States. In 2024, Enbridge spent US$14 billion to buy three American natural gas utilities. The deal made Enbridge the largest natural gas utility operator in North America. These assets provide opportunities for expansion, while further diversifying the revenue stream with predictable cash flow.
Enbridge is working through a $39 billion capital program. The boost to revenue and earnings is expected to deliver annual adjusted earnings per share (EPS) and distributable cash flow (DCF) growth of 5% in 2027 and beyond. That should enable the board to continue raising the dividend in the 3% to 5% range. Enbridge increased the dividend in each of the past 31 years.
The stock is up 20% in the past year and now trades near its record high, but investors who buy ENB at the current level can still get a dividend yield of 5.3%.
The bottom line
Fortis and Enbridge pay attractive dividends that should continue to grow. If you have some cash to put to work in a buy-and-hold dividend portfolio these stocks deserve to be on your radar.
