Amid an uncertain environment shaped by geopolitical tensions, elevated inflation and potential job disruptions from the growing adoption of artificial intelligence (AI), building passive income has become increasingly important. Dividend-paying stocks offer a reliable and cost-effective way to generate steady income.
Backed by established business models, strong cash flows, and consistent payouts, these companies tend to be more resilient during economic volatility, adding stability to portfolios. Investors can further enhance returns by reinvesting dividends over time. Notably, dividend-paying stocks have historically outperformed non-dividend-paying stocks, making them compelling long-term investments. With this in mind, here are two high-quality dividend stocks that could help strengthen your passive income for years to come.
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Enbridge
Enbridge (TSX: ENB) is a leading energy infrastructure company that transports oil and natural gas across North America through pipelines supported by tolling frameworks and long-term take-or-pay contracts. It also operates natural gas utilities in the United States and holds a portfolio of renewable energy assets supported by long-term power purchase agreements (PPAs). Given its contracted business model and the fact that about 80% of its earnings are indexed to inflation, the company’s financials are less exposed to rising input costs, thereby generating stable and predictable cash flows.
This resilience has helped Enbridge deliver a total return of over 1,040% in the past 20 years, reflecting an annualized gain of 13%. It has also paid uninterrupted dividends for over 7 decades, increased them for 31 consecutive years, and currently offers a forward yield of 5.2%.
Looking ahead, steady demand for oil and natural gas, along with rising production in North America, supports its growth outlook. With $50 billion in identified opportunities and annual investments of $10–$11 billion, Enbridge expects steady earnings and cash flow growth in the coming years. Having returned $38 bi llion in the last five years, the company’s management hopes to return return $40–45 billion over the next 5 years, reinforcing its appeal as a long-term income investment.
Bank of Nova Scotia
Another dividend stock that stands out for long-term investors is the Bank of Nova Scotia (TSX: BNS), a diversified financial services provider with operations in more than 55 countries. Its broad revenue base supports stable and reliable cash flows, enabling the bank to pay dividends consistently since 1833. Over the past decade, it has increased its dividend at an annualized rate of 4.7% and currently offers an attractive forward yield of 4.4%, making it appealing for income-focused investors.
The bank has also begun the current fiscal year on a strong footing. Its adjusted earnings per share rose 16.5% year over year to $2.05 in the recently reported first quarter earnings, driven by solid performance across its key business segments. Additionally, its common equity tier 1 (CET1) ratio improved to 13.3%, supported by higher retained earnings and the divestiture of select international operations, strengthening its balance sheet.
Looking ahead, BNS is prioritizing the expansion of its North American operations while scaling back exposure to higher-risk Latin American markets. This strategic shift could improve earnings stability and support more sustainable long-term growth, thereby strengthening its ability to deliver consistent, growing dividends. Additionally, the stock trades at a forward price-to-earnings multiple of around 12 based on analysts’ estimates for the next four quarters, making it an attractive investment opportunity.
