The TSX has several top-quality dividend stocks with long histories of rewarding shareholders through consistent and growing payouts. Among these top dividend payers, I’ll focus on three Canadian stocks that are “best in class” for returning cash to their shareholders.
These Canadian stocks have shown their ability to increase dividends through different economic cycles. The payouts of these companies reflect the strength of their business models, disciplined capital allocation, and resilient cash flow generation. These companies are also well-positioned to continue raising their dividends in the years ahead.
The resilience of their payouts, solid dividend payment history, and ability to keep growing their annual distributions make them “best in class” for dividends.
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Best Canadian dividend stock #1: Fortis
Investors looking for stocks that are best in class for dividends should consider Fortis (TSX:FTS). The utility company consistently rewards its shareholders with dividend payments and growth, regardless of the economic environment.
Fortis derives the majority of its earnings from regulated electricity and natural gas transmission and distribution businesses. Because its operations are governed by regulated pricing frameworks, the company delivers predictable revenue and stable cash flows, largely insulated from commodity price volatility. This defensive business structure has enabled Fortis to consistently increase its dividend.
Fortis has increased its annual dividend for 52 consecutive years, reflecting financial discipline and the strength of its regulated asset base.
Looking ahead, Fortis’s $28.8 billion capital plan will expand its regulated utility network. This capital investment program is expected to drive steady growth in its regulated rate base, providing the foundation for management’s targeted annual dividend growth of 4% to 6% over the coming years. Additionally, rising electricity demand is expected to create further earnings opportunities, strengthening the sustainability of future dividend increases.
Overall, Fortis is a best-in-class dividend stock.
Best Canadian dividend stock #2: TC Energy
TC Energy (TSX:TRP) is among the top dividend-paying stocks on the TSX. The company’s portfolio of regulated and long-term contracted energy infrastructure assets provides stable and predictable cash flows. This adds stability to its financials and supports higher dividend payments.
TC Energy has raised its dividend for 26 consecutive years, reflecting the resilience of its business model and a growing earnings base. Strong asset utilization and a largely contract-based revenue structure continue to drive its earnings and payouts.
Looking ahead, TC Energy’s growth pipeline remains robust, with approximately $23 billion in secured capital projects that are expected to drive future earnings and cash flow expansion. The company is also well-positioned to benefit from structural trends shaping the energy sector. Rising electricity demand from AI-driven data centres and increasing liquefied natural gas (LNG) exports are expected to strengthen demand for North American energy infrastructure, creating additional growth opportunities.
Thanks to its resilient cash flow and solid growth opportunities, TC Energy expects to increase the dividend by 3% to 5% annually. Its solid distribution history and visibility over future payouts make it an attractive dividend stock.
Best Canadian dividend stock #3: Toronto-Dominion Bank
Toronto-Dominion Bank (TSX:TD) is a compelling option for dividend investors, backed by a long history of rewarding shareholders. The leading Canadian bank’s payout benefits from a diversified revenue model, solid credit quality, and resilient earnings.
TD has distributed dividends for more than 169 years and recently raised its quarterly dividend by 4% to $1.12 per share. Over the past decade, its dividend has increased at an average annual rate of approximately 8%, reflecting management’s commitment to reward shareholders. With a payout ratio of roughly 40%–50%, the dividend appears well-supported, leaving room for future increases alongside business investments.
The bank’s recent financial results were driven by strong business momentum, margin improvement, disciplined cost management, and healthy lending growth. Supported by a high-quality loan portfolio, diversified revenue streams, and efficient operations, TD remains well-positioned to deliver sustainable earnings and dependable dividend growth.
