One of the best signs that a Canadian stock is performing well isn’t necessarily a soaring share price. In many cases, it’s management’s willingness to continue increasing the dividend year after year.
After all, share prices can rise (or fall) for any number of reasons, and a lot of the time, with very little to do with changes in the underlying business.
However, companies cannot consistently raise their payouts without generating reliable earnings and strong cash flow over the long haul.
That’s why dividend-growth stocks continue to be some of the most attractive investments on the TSX. Not only do they provide passive income, but regular dividend increases are one of the strongest signs of a healthy business with a proven ability to navigate different economic environments.
So, if you’re looking for high-quality Canadian dividend stocks to consider for your portfolio, here are three consistent dividend growth stocks that have already raised their payouts this year.
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One of the best Canadian dividend stocks to buy and hold for decades
When it comes to buying high-quality and reliable businesses that you can own for decades with confidence, one of the top picks to consider is unquestionably Canadian National Railway (TSX: CNR).
Canadian National Railway isn’t the type of stock most investors buy for its yield alone.
In fact, compared to many traditional dividend stocks, its current yield of 2.2% is relatively modest. However, that’s largely because the company has historically reinvested heavily into growing and strengthening its business, and that strategy has paid off.
As one of the most important rail networks in North America, Canadian National plays a critical role in moving goods throughout the economy.
From consumer products and agricultural shipments to industrial materials and energy products, its network remains essential to Canadian and North American commerce, which is why it’s a business you can own for years with confidence.
And that reliability leads to consistent profitability and earnings growth, which is why it’s not surprising that Canadian National has a dividend growth streak that’s lasted for 30 straight years.
One of the best and most consistent retailers on the TSX
In addition to Canadian National, another impressive growth stock that continues to increase its dividend each year is Canadian Tire (TSX: CTC.A).
Canadian Tire has been a fixture in Canadian retail for generations. So, although retail can sometimes be viewed as a cyclical industry, Canadian Tire’s collection of brands, loyalty programs, and nationwide footprint have helped it build a durable competitive position.
The company continues to benefit from its exposure to several different retail categories, helping diversify its revenue stream and reduce its dependence on any single segment of the market.
Like many retailers, Canadian Tire has faced its share of economic challenges over the years. However, the company has repeatedly demonstrated its ability to adapt while continuing to generate the cash flow needed to fund its dividend and help support its 16-year dividend growth streak.
A company doesn’t continue raising its payout through multiple economic cycles and pay out enough to offer an attractive yield of roughly 3.8%, without having a strong underlying business supporting it.
An impressive cash flow generator in the energy sector
Canadian Natural Resources (TSX: CNQ) is another impressive dividend growth stock that has increased its dividend this year, and while, as an energy producer, it operates in a more cyclical industry than the other stocks on this list, it continues to show it’s one of the best dividend growth stocks in Canada.
Because it owns a diversified portfolio of long-life assets and has some of the strongest economics in the Canadian energy sector, its low-cost operations allow it to remain highly profitable across a wide range of commodity-price environments.
That strength has helped the company generate enormous amounts of free cash flow over the years and led to a 26-year dividend growth streak.
Furthermore, with the stock now trading off its highs, and with its yield climbing back above 4.4% on ceasefire news in recent weeks, investors have the perfect opportunity to buy the Canadian dividend stock today.
So, if you’re looking for reliable long-term income you can count on, high-quality dividend growth stocks like CNQ are exactly the kinds of picks that make it easy to buy, hold, and let them do the work over time.
