If you love dividends, TSX stocks are a great place to look. In Canada, you can find stocks in a wide mix of industries, sectors, and geographies. If I wanted passive dividend income that could last a decade (or more), here is a five-stock portfolio I would happily own today.
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AltaGas: A long-term dividend-growth story
AltaGas (TSX: ALA) has a market cap of $16 billion and a dividend yield of 2.6%. It might not be the largest yield. However, the company has substantial growth opportunities that should ensure years of dividend growth ahead.
AltaGas operates a regulated utility in the U.S. and a diversified midstream business in Western Canada. The utility is growing its rate base by a high single-digit rate. The midstream business is enjoying strong pricing and growing volume demand for Canadian energy exports to Asia.
This is a de-risked, high-quality infrastructure business you can tuck away for attractive total returns in the years ahead.
Dream Industrial REIT: An elevated yield
If you just want an elevated dividend yield, Dream Industrial Real Estate Investment Trust (TSX: DIR.UN) is an attractive option. It has a market cap of $3.9 billion and a distribution yield of 5%.
Dream owns and manages 343 multi-tenanted industrial properties across Canada, Europe, and the United States. It has solid 95.7% occupancy and attractive embedded rental rate growth on lease turnover/renewal.
This stock also happens to be cheap and trades at a discount to other industrial peers. If you just want a nice, safe dividend and modest capital appreciation, it’s a good stock to hold.
Exchange Income: A growth story with income
If you are looking for a little more growth and a monthly dividend, Exchange Income Corporation (TSX: EIF) is an interesting stock. It has a market cap of $5.7 billion and a dividend yield of 2.77%.
It is a diversified provider of essential air services, aerospace/defence components, and industrial solutions (like environmental mats, telecom infrastructure, and windows). The key to many of its businesses is how essential its products/services are to the customers it serves.
Exchange has grown its dividend for 18 out of the past 20 years. This stock offers a diversified business, attractive growth/investment opportunities, and a rising monthly dividend.
Canadian Natural: A dividend-growth legend
Canadian Natural Resources (TSX: CNQ) is a Canadian dividend legend you don’t want to miss. It has a market cap of $136 billion and a yield of 3.86%.
Canadian Natural is Canada’s largest energy producer and one of its largest companies. With oil prices elevated, this company is likely chugging out serious cash flow.
With a very modest balance sheet, it is primed to keep growing its dividend and maybe even deliver special dividends to shareholders. Canadian Natural has a 26-year history of growing its dividend. It’s a great decade-long bet ahead.
Canadian Pacific: A top blue-chip stock
Speaking of legends, Canadian Pacific Kansas City (TSX: CP) is one of Canada’s longest enduring railroads and companies. It has a market cap of $100 billion and a yield of 0.88%.
Certainly, it has the smallest dividend in the mix. Last year, it raised its dividend by 20%. This year, it increased its dividend by 17.5%. Likewise, it has been buying back stock aggressively (4% last year and potentially 5% this year).
The company is only now starting to unlock the benefits of its nationwide railroad system. It still has a long journey of growth ahead. This blue-chip stock has lasted for decades and will likely last for decades to come.
