For investors seeking reliable income, dividend stocks that increase their payouts can be attractive options. TSX stocks with a track record of increasing dividends not only provide income today but can also help investors grow that income over time.
A history of regular dividend hikes also signals financial strength and a commitment to returning more capital to shareholders. Their solid payouts make these stocks worth considering for investors focused on building a dependable, growing income stream.
Against this backdrop, here are two Canadian dividend stocks that increase payments over time.
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Canadian Dividend Stock #1
Fortis (TSX: FTS) offers investors a reliable dividend that grows over time. The Canadian utility company has increased its annual dividend for an impressive 52 consecutive years, making it one of Canada’s longest-running dividend-growth stocks. Management expects to grow the dividend by 4% to 6% annually through 2030. Meanwhile, it offers a yield of about 3.4%.
Fortis’ dividend is driven by its regulated utility business. The company owns and operates electricity and natural gas transmission and distribution infrastructure across North America. Because much of its revenue comes from regulated assets and rates, Fortis generates predictable cash flow that supports its payouts.
Fortis’ growing rate base provides the catalyst for future earnings and dividend growth. The company plans to invest $28.8 billion in capital projects through 2030, which is expected to expand its rate base to $57.9 billion, representing a roughly 7% compound annual growth rate. As the rate base expands, Fortis can generate additional regulated earnings, creating a foundation for continued dividend increases.
Several long-term trends also work in Fortis’ favour. Rising electricity consumption, increased investment in U.S. transmission infrastructure, renewable-energy development, grid modernization, and the expansion of clean-gas infrastructure in British Columbia could all create additional opportunities for capital investment.
Overall, Fortis is a reliable dividend stock with the ability to keep growing its distributions over time.
Canadian Dividend Stock #2
Enbridge (TSX: ENB) is another top TSX stock offering a reliable, growing dividend. Enbridge has paid dividends for more than seven decades and has increased its payout every year since 1995. With a dividend yield of roughly 5.9% and dependable payouts, Enbridge is a compelling stock for income investors.
Enbridge operates across liquid pipelines, natural gas infrastructure, gas utilities, and renewable energy. Its diversified operations add resilience and allow it to benefit from energy demand.
Most of its EBITDA comes from regulated businesses or long-term take-or-pay contracts. This helps shield cash flow from commodity price swings and provides visibility into future earnings.
The company expects adjusted EBITDA, earnings per share, and distributable cash flow (DCF) per share to grow roughly 5% annually over the medium to long term, supporting its payouts. Moreover, its target payout ratio of 60% to 70% of DCF is sustainable in the long run.
Looking ahead, Enbridge’s $39 billion backlog of secured capital projects, many backed by regulated frameworks or long-term contracts, augurs well for growth. Growing demand from data centres, natural gas consumption, and renewable energy could also provide additional tailwinds.
For dividend investors, Enbridge offers a compelling high yield and worry-free income.
