Dividend stocks are excellent choices for long-term wealth creation, as investors can benefit from both capital appreciation and a steady stream of income. Investors can further enhance returns by reinvesting dividends, thereby harnessing the power of compounding over time.
Moreover, thanks to their consistent payouts, dividend-paying stocks tend to be less prone to market fluctuations, helping improve the resilience of an investment portfolio. Against this backdrop, here are four high-quality dividend stocks investors can buy and hold over the next four years.
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TC Energy
TC Energy (TSX: TRP) operates an extensive natural gas pipeline network across North America and a portfolio of power generation assets, with most of its electricity output sold under long-term contracts. Approximately 98% of the company’s earnings are generated from rate-regulated assets and take-or-pay agreements, supporting stable cash flows and consistent financial performance.
Backed by this resilient business model, TC Energy has uninteruptedly raised its dividend for 26 consecutive years, while its forward yield currently stands at 3.8%.
Looking ahead, the company continues to expand its asset base through annual capital investments of roughly $6 billion to meet growing demand for natural gas infrastructure across North America. Supported by these investments, management expects adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) to grow at an annualized rate of 3% to 5% through 2028, positioning TC Energy to continue delivering steady dividend growth.
Bank of Nova Scotia
Another dividend stock that I am bullish on is Bank of Nova Scotia (TSX: BNS), which offers a diversified portfolio of banking and wealth management services across multiple markets. Its diversified revenue streams support stable and reliable cash flows, enabling the bank to pay dividends continuously since 1833. BNS has also increased its dividend at an annualized rate of 4.5% over the past decade and currently offers an attractive yield of 3.8%.
Looking ahead, the bank continues to expand its operations, including plans to acquire the remaining shares of Scotia Group Jamaica that it does not already own. Meanwhile, a higher-interest-rate environment could support net interest margins and benefit its core lending business. Given its resilient business model and solid growth prospects, I expect BNS to continue delivering attractive returns to income-focused investors.
Hydro One
Hydro One (TSX: H) is a pure-play electricity transmission and distribution utility with no exposure to power generation. Supported by its regulated asset base, the company’s financial performance is less vulnerable to commodity price fluctuations and broader market volatility. Continued investments in expanding its asset base have supported earnings growth, enabling Hydro One to increase its dividend for nine consecutive years. The utility currently offers a forward dividend yield of 2.4%.
Looking ahead, rising population levels and ongoing residential development across its service territories should drive higher demand for electricity distribution services, creating additional growth opportunities. Hydro One also has 15 transmission projects at various stages of development and construction, which could support future earnings growth.
Given its resilient business model and attractive growth prospects, I believe Hydro One is well-positioned to continue delivering both capital appreciation and growing dividend income to investors.
Northland Power
My final pick is Northland Power (TSX: NPI), which develops, owns, and operates a diversified portfolio of energy infrastructure assets with approximately 3.5 gigawatts of generating capacity. The company sells most of the electricity produced from these facilities under long-term power purchase agreements, helping shield its financial performance from market volatility.
Meanwhile, the global transition toward cleaner energy continues to create significant long-term growth opportunities for Northland Power. To capitalize on this trend, the company plans to invest between $5.8 billion and $6.6 billion over the next five years, a strategy that could increase its production capacity at an annualized rate of 16%.
In addition, Northland’s focus on improving operational efficiency and optimizing costs should support earnings and cash flow growth, reinforcing the sustainability of its dividend. Meanwhile, the company’s current monthly dividend payout of $0.06 per share yields 3.3% on a forward basis.
