Finding dividend stocks that you can confidently hold through every market cycle is a great way to create long-term wealth. Dividend stocks are all about sleeping well at night.
The best dividend stocks combine resilient business models, predictable cash flows, and growing dividends. Here are the top Canadian dividend stocks I’d feel good holding for the next seven years.
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AltaGas: A dividend stock to confidently hold for the next seven years
AltaGas (TSX:ALA) has delivered exceptional returns over the past five years. Its stock is up 127% in the past five years. Add in dividends, and shareholders have earned a 179% total return.
This company has quietly transformed into a powerhouse in the past few years. It divested its non-core assets. AltaGas reduced debt from 11 times net debt-to-EBITDA (earnings before interest, tax, depreciation, and amortization) to 4.4 times today! It focused on its American natural gas utilities and Canadian midstream businesses.
A solid utility business
AltaGas benefits from outsized rate base growth in its utility as it looks to modernize its infrastructure. Its utilities are located in some of the top regions for data centre construction.
It is positioning to provide behind-the-metre gas supply and back-up power generation for key data centres in Virginia. Overall, this is a stable business with a steady growth outlook.
A booming midstream operation
Its midstream business is really starting to boom. It is one of Canada’s largest exporters of liquefied petroleum gases (LPG). In fact, 6% of China’s LPG imports and 14% of South Korea’s LPG imports come from AltaGas facilities. LPG supply out of the Gulf regions is halted; demand for AltaGas’s supply is soaring.
AltaGas just delivered very strong first-quarter results. Its export volumes rose 5%. New tanker charters should help accelerate this even faster. Earnings before interest, tax, depreciation, and amortization (EBITDA) rose 18.7% to $818 million! Earnings per share (EPS) increased 16% to $1.33.
AltaGas now expects to hit the top end of its 2026 guidance for EBITDA and EPS. Many analysts believe that if the Strait of Hormuz remains blocked, it could exceed its guidance forecast.
This dividend stock has several catalysts for the future as well. It is building a 56,000 barrels per day export terminal in Prince Rupert. That should be completed in mid-2027. It also has natural gas storage/processing facilities and various other expansions and optimizations in the works. It has over $1.7 billion of capital allocated for growth projects in 2026.
Strong future performance will support strong dividend growth
AltaGas has grown its dividend every year since 2020. It has raised its dividend by a 6% compounded annual growth rate. At the same time, it also drastically improved its balance sheet. Now, it is sitting in a position with excess liquidity.
Today, it seems possible that it could hit the higher end of its annual dividend growth target of 5-7%. Given that its payout ratio sits below 60%, its dividend-growth trajectory appears likely.
This dividend stock yields 2.4% today. While it is not the biggest dividend yield, investors have enjoyed a great total return profile of 22% compounded annual growth. It’s a great utility-like stock to buy and hold for the coming seven years.
