Investors planning to create a strong income portfolio could consider fundamentally strong companies with steady cash flows and sustainable payouts across diverse sectors. This can help create a more resilient portfolio that generates a consistent stream of income year after year.
With that in mind, here are five dividend stocks I’d consider adding to an income-focused portfolio.
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Dividend stock #1: Enbridge
Enbridge (TSX: ENB) is a top stock I’d own in an income portfolio. The energy infrastructure company has been paying dividends for over seven decades. Moreover, it has raised its distributions annually since 1995. Further, it offers a compelling yield of 5.5%.
Enbridge’s diversified revenue base, high asset utilization, and long-term contracts enable it to generate steady earnings and distributable cash flow (DCF) across commodity cycles. This helps cover its payouts and return higher cash to its shareholders.
ENB pays out about 60%–70% of its DCF while retaining funds for growth. With a $41 billion secured project backlog and rising demand for energy, Enbridge could deliver mid-single-digit earnings and dividend growth.
Dividend stock #2: Fortis
Fortis (TSX: FTS) is another top stock to own in an income portfolio. The utility giant raised its annual dividend for 52 consecutive years and offers a reliable yield. Its regulated electricity transmission and distribution assets generate predictable revenue and stable cash flow, supporting its payouts.
Fortis also has a $28.8 billion capital plan that will help expand its rate base and earnings, driving its payouts. Management expects the investment to support low-risk rate base growth of about 7% annually through the end of the decade. This will support dividend growth of 4% to 6% annually.
At the same time, rising electricity demand could create additional growth opportunities. Its defensive business model and consistent dividend increases make Fortis an attractive option for income investors.
Dividend stock #3: Toronto-Dominion Bank
Toronto-Dominion Bank (TSX: TD) remains an attractive income investment. Its long history of rewarding shareholders, ability to deliver profitable growth, and sustainable payouts make it a reliable investment. TD has been paying dividends for decades. Moreover, since 2016, it has increased its annual dividend by about 8% annually.
TD’s diversified revenue, high-quality earnings, operating efficiency, and solid credit quality position it well to keep rewarding its shareholders.
TD maintains a sustainable 40–50% dividend payout ratio. Moreover, the bank is well-positioned to keep returning significant cash to its shareholders.
Dividend stock #4: Emera
Emera (TSX: EMA) is an attractive dividend stock for income-focused investors. Its regulated electric and natural gas utilities generate stable earnings and reliable cash flow, enabling it to pay and increase its dividend year after year. Emera has raised its distributions for close to two decades and expects annual dividend growth of 1% to 2% in the years ahead.
Emera’s rate base is expected to increase by 7% to 8% through 2030. This will help the company to grow its EPS by 5% to 7% annually, driving higher payouts. Moreover, its investments in solar, energy storage, transmission, and grid modernization should help Emera benefit from rising energy demand while continuing to return capital to shareholders.
Dividend stock #5: TC Energy
TC Energy (TSX: TRP) is among the top dividend-paying stocks on the TSX. Its payouts are supported by regulated and long-term contracted energy infrastructure that generates stable, predictable cash flow.
TC Energy has increased its dividend for 26 consecutive years. Strong asset utilization and contract-based revenues are likely to keep driving its earnings and payouts.
Looking ahead, TC Energy’s multi-billion-dollar secured projects are expected to drive future growth. Rising electricity demand from AI data centres and growing LNG exports could further boost demand for North American energy infrastructure.
With resilient cash flow and attractive growth prospects, TC Energy expects to raise its dividend by 3% to 5% annually, making it a compelling stock to add in an income portfolio.
