The Canadian equity market has several high-quality dividend-paying companies with sustainable payout ratios. Among these top Canadian stocks, I’d feel good about holding companies with a strong likelihood of maintaining their dividends and ability to consistently increase them over the next seven years.
TSX stocks backed by strong fundamentals, a growing earnings base, and a commitment to returning cash to shareholders are well-positioned to pay and increase their distributions.
With this backdrop, here are two dividend stocks that appear well-positioned to sustain their dividend growth trajectories, supported by solid financial performance.
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Top dividend stock #1: Enbridge
I’d be happy to hold Enbridge (TSX: ENB) stock for the next seven years for its ability to keep growing dividends and its compelling yield. The energy infrastructure company has paid dividends for more than 7 decades and has demonstrated a commitment to enhancing shareholder value.
Since 1995, Enbridge has raised its dividend at an average annual rate of roughly 9%, highlighting the resilience of its business model across commodity cycles and economic conditions. Moreover, it offers a high yield of 5.1%.
Enbridge’s low-risk, diversified business model and an extensive network of energy infrastructure assets help reduce earnings volatility and support stable distributable cash flow (DCF). Much of Enbridge’s EBITDA comes from regulated operations or long-term take-or-pay contracts, limiting exposure to commodity price swings and providing a predictable revenue base for sustaining dividend payments. In addition, many of these agreements are protected against inflation.
Enbridge’s expansive infrastructure network further strengthens its outlook. Its pipelines and related assets connect major supply basins with key demand centers across North America. This ensures strong utilization of its assets and positions ENB to benefit from continued energy demand.
Over the past five years, Enbridge has returned about $38 billion to shareholders through dividends. Management expects to distribute between $40 billion and $45 billion over the next five years, supported by expanding regulated and contracted cash flows. With a targeted DCF payout ratio of 60% to 70%, the dividend appears sustainable while allowing the company to retain capital for future growth.
Overall, Enbridge remains an attractive option for investors seeking reliable dividend income and steady growth over the next seven years.
Top dividend stock #2: Emera
Emera (TSX: EMA) is another dividend stock I’d be happy to hold for the next seven years. The company operates regulated electric and natural gas utilities, as well as related energy infrastructure businesses. Because these operations are highly regulated and essential to everyday economic activity, Emera generates predictable, resilient cash flow across different market environments.
This defensive business structure enables Emera to consistently return capital to shareholders through regular dividend payments.
Emera has consistently returned more cash to its shareholders by increasing its dividend for 19 consecutive years. Its payouts reflect the durability of its earnings base.
Looking ahead, Emera’s growth outlook remains solid, supported by significant capital investment and rising energy demand. Emera plans to invest more than $20 billion through 2030, targeting grid modernization, renewable energy development, energy storage, and natural gas infrastructure. These initiatives are expected to expand Emera’s regulated rate base at an annual pace of approximately 7% to 8%, which management believes can support adjusted earnings per share growth of about 5% to 7% per year.
As earnings gradually increase, management expects dividends to continue rising, with projected annual dividend growth of roughly 1% to 2%. For investors seeking a stable and steadily growing dividend stream, Emera remains a dependable long-term holding.
