Dividend stocks are typically shares of well-established companies that return a portion of their earnings to shareholders through regular payouts. As a result, investors can benefit from a steady stream of passive income along with the potential for long-term capital appreciation. Moreover, reinvesting those dividends can accelerate wealth creation through compounding over time. Thanks to their stable businesses and reliable cash flows, quality dividend stocks also tend to be more resilient during periods of economic uncertainty and market volatility.
With that in mind, let’s look at two top-quality dividend stocks that investors can buy and hold over the next five years to build substantial long-term wealth.
Source: Getty Images
Fortis
Fortis (TSX:FTS) is an electric and natural gas utility serving approximately 3.5 million customers across Canada, the United States, and the Caribbean. With a regulated asset base and nearly 95% of its operations focused on low-risk transmission and distribution businesses, the company generates stable and predictable earnings that are less vulnerable to economic volatility and commodity price fluctuations. In addition, Fortis has benefited from an expanding rate base and improving operational efficiency, which have supported both its financial performance and long-term share price growth.
Over the past 20 years, the utility’s average total shareholder return stands at 10.3%, outperforming the broader equity markets. Fortis has also increased its dividend for 52 consecutive years and currently offers a reliable forward dividend yield of around 3.4%.
Meanwhile, rising demand for electricity and natural gas, driven by economic growth and infrastructure development, continues to create favourable conditions for the company. To capitalize on these trends, Fortis is investing heavily in expanding its rate base through its $28.8 billion capital plan, including $5.6 billion scheduled for this year alone. These investments could grow the company’s rate base at a 7% compound annual growth rate (CAGR) through 2030, reaching $57.9 billion by the end of the decade. Alongside these expansion projects, favourable rate revisions, preventive maintenance initiatives, operational innovation, and efficiency programs could further strengthen its financial performance in the years ahead.
Supported by its resilient business model and long-term growth initiatives, Fortis management expects to increase its dividend by 4%–6% annually over the coming years, making the stock an attractive option for long-term investors seeking steady income and capital appreciation.
Enbridge
Another dividend stock that I believe is well-suited for investors with a long-term investment horizon is Enbridge (TSX:ENB). The company operates a diversified energy infrastructure business that includes contracted midstream and energy-delivery operations, regulated utility assets, and renewable energy facilities backed by long-term power purchase agreements (PPAs). This business mix helps shield Enbridge’s financial performance from commodity price fluctuations and broader macroeconomic volatility, enabling it to generate stable, reliable cash flows.
Supported by these resilient cash flows, Enbridge has paid dividends for more than 70 years. The company has also increased its dividend for 31 consecutive years and currently offers an attractive forward dividend yield of around 5.1%.
Looking ahead, oil and natural gas are expected to remain essential components of the global energy mix despite the ongoing transition toward cleaner energy sources. At the same time, rising oil and natural gas production across North America continues to support demand for Enbridge’s infrastructure and energy distribution services. To capitalize on these long-term trends, the company is advancing its secured $40 billion capital investment program, with projects scheduled to enter service through 2030. Supported by these growth opportunities, management expects to return between $40 billion and $45 billion to shareholders over the next five years, making Enbridge an attractive long-term investment for income-focused investors.
