Stock market investors in Canada have several possible ways to generate significant returns through their portfolios. One of the best ways to get consistent returns is through quarterly or monthly distributions from Canadian dividend stocks.
Several top dividend stocks have paid investors for decades, with some of them increasing payouts for years. The top dividend stocks can be reliable investments to create a passive income. Today, I will discuss a few of the best that virtually every stock market investor should own.
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Energy sector players
Enbridge Inc. (TSX: ENB) is a top dividend stock to buy whenever share prices go down. The company owns and operates an extensive pipeline network that transports crude oil and natural gas across North America. It also has growing renewable energy operations and has one of the largest utility businesses in the region under its belt.
Enbridge has paid investors quarterly dividends for 70 years straight, and has increased payouts consistently for 31 years. There is strong demand for its services, and it is well-positioned to generate stable distributable cash flow for years. It can be an excellent addition to any income-focused investment portfolio.
Whitecap Resources Inc. (TSX: WCP) offers another avenue to invest in the energy sector. Headquartered in Calgary, the $20.3 billion market cap company acquires, develops, and produces crude oil and natural gas. While not as old as Enbridge stock, it has established itself as a reliable dividend stock. The solid dividend stock has returned around $3.2 billion to its investors in the last 13 years.
After its recent acquisition of Veren, it has expanded production and market reach. It is well-positioned to continue paying dividends. As of this writing, WCP stock is up by almost 97% in the last 12 months. Despite the massive uptick, it boasts a juicy 4.4% dividend yield that you can lock into your self-directed investment portfolio today.
Utilities giants
Fortis Inc. (TSX: FTS) is the top pick for many stock market investors who want set-it-and-forget-it dividend stocks for their portfolios. The Canadian dividend stock boasts a 52-year dividend-growth streak, supported by a defensive business model that generates stable and steady cash flows regardless of market cycles.
Owning and operating several regulated utility businesses with long-term contracted assets provides predictable cash flows. The company can use those returns to comfortably fund its capital programs and increase payouts. Trading at $75.25 per share, Fortis stock pays investors at a 3.4% dividend yield. It can be a safe investment to consider for any investor’s portfolio.
Canadian Utilities Ltd. (TSX: CU) is another utility stock that warrants a place in many investment portfolios. Like Fortis stock, it is an excellent dividend-paying stock with a 54-year dividend-growth streak. The primary business of Canadian Utilities is the transmission and distribution of natural gas and electricity. However, it also has energy storage and generation, as well as industrial water solutions operations, under its belt, with plans to expand into new business lines and markets.
With revenue from regulated utilities accounting for most of its cash flows, CU is well-positioned to continue increasing its payouts for years to come. As of this writing, CU stock trades at $48.29 per share and boasts a 3.8% dividend yield that could rise slightly on the next pullback.
Financial services player
Long-term investors can virtually never go wrong with any of Canada’s Big Six Banks, and Bank of Montreal (TSX: BMO) is one of the best picks among them. BMO is a $148 billion market-cap giant in the Canadian financial services sector, and one of the largest banks in North America in terms of assets it owns.
The reason I love BMO is its almost two-century-long streak of paying investors their dividends. While regulations have kept it from boasting a lengthy dividend-growth streak, BMO has increased its payouts by about 5.7% annually over the last 15 years. The Big Six bank can be a good investment to consider.
Foolish takeaway
Recent upticks on the stock market have seen the share prices of several high-quality TSX stocks go higher in recent weeks. As a result, dividend yields have become slightly deflated. Buying these stocks when the next pullback comes can improve long-term returns by locking in higher-yielding dividends.
