The Canadian Companies That’ve Been Quietly Raising Their Dividend Payouts

These Canadian companies have quietly raised their dividend payouts for decades, offering investors a mix of income and long-term growth.

Demetris Afxentiou

Author Bio Demetris has a professional background in business and technology and has been writing about Canadian markets and personal finance for The Motley Fool Canada for more than a decade. His investing journey has evolved from mutual funds and precious metals to individual stocks, cryptocurrency, and long-term wealth-building strategies. Over the years, his interest in the market led him to discover what he calls “everyday stocks”: quality businesses that people interact with regularly but may not realize they can invest in and potentially earn income from. Demetris focuses on helping investors understand the businesses behind the stocks they own and build practical portfolios aligned with their financial goals. His approach to investing centres on making thoughtful choices today to create greater financial freedom in the future. Areas of Expertise Canadian stocks, dividend investing, TFSAs, RRSPs, real estate investment trusts (REITs), personal finance, cryptocurrency, and long-term wealth building.

Published July 10, 4:00 pm EDT

Yield is usually one of the first things that investors look at when determining whether to buy a dividend stock. Larger yields do mean more income today, but the number itself doesn’t reveal the frequency or growth in those dividend payouts.

In fact, steady growth in those dividend payouts can provide significant income growth over time.

The key is finding the right stocks that can offer both impressive dividend payouts and growth to match. Fortunately, there’s a trio of dividend stocks on the market that offer exactly that.

Here’s a look at those three stocks with attractive dividend payouts to buy now.

dividend growth for passive income — Source: Getty Images

Option #1: Canadian National Railway

Canadian National Railway (TSX: CNR) has a dividend that doesn’t attract a lot of attention, at least initially. As of writing, the railway stock offers a yield of just 2.1%.

That’s hardly the most impressive yield. In fact, it comes in well below many other traditional Canadian dividend stocks.

But behind that yield is a streak of annual increases to that dividend that extends 30 consecutive years. That includes a 3% increase announced earlier this year, which brings the payout to $0.92 per share.

At the core of those dividend payouts is Canadian National’s impressive and irreplaceable network. The company operates one of the largest rail networks in North America, connecting three coastlines to ports, warehouses, and nearly every major metro market.

The goods that Canadian National hauls comprise everything from automotive parts and chemicals to crude oil, precious metals and wheat.

And because that rail network was built up over decades, communities have built up around those tracks. This means that for any would-be competitor to rise up and challenge Canadian National, it would take decades to build and cost tens of billions.

In other words, Canadian National offers one of the best defensive moats on the market. It also makes the stock one that dividend investors should be watching.

Option #2: Canadian Natural Resources

The second option for investors to consider is Canadian Natural Resources (TSX: CNQ).

Canadian Natural Resources is one of the largest oil and gas producers on the continent. The company boasts long-life, low-decline assets that help it generate reliable cash flow that’s used to pay down debt, pay a generous dividend and maintain operations.

As of the time of writing, Canadian Natural offers a yield of 4.2%. Concurrently, the company has provided investors with annual increases to that dividend for 26 consecutive years without fail.

Perhaps best of all, prospective investors should note that over that period, Canadian Natural reported a 20% compound annual growth rate in that dividend.

Option #3: Canadian Utilities

Wrapping up the list of stocks with generous dividend payouts is Canadian Utilities (TSX: CU).

Canadian Utilities is one of the larger utility stocks on the market. The company provides regulated and long-term contracted utility service to customers in Canada, as well as a presence in other markets such as Mexico, Australia, and Puerto Rico.

The regulated nature of utilities means that Canadian Utilities generates a recurring, predictable, and stable revenue stream. That revenue can then be used to invest in growth initiatives and pay the company’s quarterly dividend.

As of the time of writing, that dividend carries a yield of 3.5%. In terms of growth, Canadian Utilities has provided investors with annual upticks to that dividend for an incredible 54 consecutive years without fail. That’s the longest dividend increase streak of any company in Canada.

The defensive appeal of utility stocks and the consistent dividend payouts are two key reasons why utilities like Canadian Utilities are frequent options for income-focused investors.

Grow your dividend payouts over time

The trio of stocks mentioned above is a great example of dividend growth stocks with steadily rising payouts.

For investors building a long-term income portfolio, the three stocks represent a diversified mix of options that keep increasing their dividend payouts year after year.

This makes them compelling options in any larger, well-diversified portfolio.

Buy them, hold them, and watch your future income grow.