Dividend stocks can be one of the most reliable means to generate a passive income that rewards you for decades. I would happily double my position in reliable dividend stocks that keep distributing shareholder dividends through harsh economic environments year after year. Not every dividend stock can be a reliable investment. The underlying business must have the ability to sustain payouts for the long run.
To this end, I will discuss four TSX dividend stocks that can be superb long-term investments.
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Canadian Utilities
Canadian Utilities Ltd. (TSX:CU) is one of the two utility stocks I will discuss here. Backed by a defensive business model and cash flows coming from highly regulated markets, CU stock boasts an extensive dividend-growth streak of 54 years. This is the longest unbroken dividend-growth streak on the TSX.
The company relies on long-term contracts that enhance cash flow visibility, reduce volatility in earnings, and set it up for more capital programs to grow its rate base. As of this writing, CU stock trades for $51.96 per share and pays investors $0.46 per share each quarter, translating to a 3.6% dividend yield that you can lock into your self-directed portfolio.
Fortis
Fortis Inc. (TSX:FTS) is the second utility stock. It is no surprise that it is the stock boasting the second-longest dividend-growth streak among Canadian companies, having increased payouts for 52 consecutive years. Fortis is a utility holdings company with several natural gas and electric utility businesses from Canada, the US, and the Caribbean under its belt.
Most of the company’s revenue comes from long-term contracted assets in highly rate-regulated markets. This means high-quality and predictable cash flows that the company can use to increase dividends and fund capital projects to increase its rate base for years to come. As of this writing, it trades for $80.22 per share and boasts a 3.2% dividend yield.
TC Energy
TC Energy (TSX:TRP) is another compelling dividend stock to consider adding to your portfolio. The $100.9 billion market-cap energy infrastructure company provides a massive network of natural gas pipelines that generates steady revenue from long-term take-or-pay contracts leveraging assets in a regulated market.
TC Energy also boasts a 26-year dividend-growth streak, backed by rising LNG exports, growing demand from data centres, and increasing electrification across Canada and the US. The company also has a backlog of secured capital projects worth an estimated $23 billion that shows strong visibility into future cash flow growth and earnings. As of this writing, TC Energy stock trades for $96.83 per share and pays investors a 3.6% annualized dividend yield.
Toronto-Dominion Bank
Toronto-Dominion Bank (TSX:TD) is a reliable dividend stock to consider doubling your position in if you have the money to invest in the market right now. It does not boast a lengthy dividend-growth streak, primarily due to regulatory restrictions on stocks from the financial services sector. However, it has paid investors their quarterly distributions without fail for almost two centuries.
Canada’s Big Six Banks have a reputation for being reliable dividend-paying investments, supported by a strong industry. Recent quarterly results for TD Bank showed higher deposit volumes, increasing trading and fee income, lower credit-loss provisions, and higher loan volumes. It looks well-positioned to continue its reliable dividend-distribution streak. As of this writing, TD stock trades for $164.27 per share and boasts a 2.7% dividend yield.
Foolish takeaway
Despite more announcements of ceasefires, the tensions in the Middle East might take some time to subside. If you do not want to take big risks in a volatile market, it is better to stick with investing in relatively safer stocks. To this end, these four stocks can be a good fit for your self-directed portfolio.
