4 Top Stocks With High Dividend Growth to Buy in 2023 and Hold Forever

Investors can strengthen their portfolio by adding these four high-dividend growth stocks.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The global equity markets have witnessed healthy buying over the last few days amid signs of easing inflation. The S&P/TSX Composite Index is up around 6% from last month’s lows. However, Canada’s food prices and mortgage expenses are still higher. So, I believe the federal reserve will not be in a hurry to lower its benchmark interest rates. A prolonged high-interest rate environment and higher prices could hurt economic growth, thus impacting equity markets.

Given the uncertain outlook, investors should buy high-dividend growth stocks to strengthen their portfolios and earn a stable passive income. Meanwhile, here are my four top picks.

Enbridge

Enbridge (TSX:ENB) would be one of the top dividend stocks to have in your portfolio, given its regulated business, solid track record, and high yield. The company operates a contracted midstream business, generating 98% of its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) from long-term cost-of-service contracts. So, its cash flows are stable and predictable, thus allowing it to pay dividends uninterruptedly for the last 68 years.

Besides, it has raised its dividends at a CAGR (compound annual growth rate) of 10% over the previous 28 years, with its forward yield currently at 7.2%. Meanwhile, the company is expanding its asset base with a $17 billion secured capital program. Supported by these growth initiatives, the company’s management projects its adjusted EBITDA to grow at a CAGR of 4-6% through 2025 and 5% after that. So, given its growth prospects and a healthy liquidity of $12.6 billion, Enbridge’s future payouts are safe, making it an excellent buy.

Canadian Natural Resources

Second on my list would be Canadian Natural Resources (TSX:CNQ), which has raised its dividends at a CAGR of 21% for the previous 23 years. It currently pays a quarterly dividend of $0.90/share, with its forward yield at 4.55%. Oil prices have bounced back strongly from last month’s low, with Brent crude rising by over 15% to US$83/barrel. Meanwhile, Goldman Sachs remains bullish on oil and expects oil prices to rise to US$86/barrel by the end of this year amid production cuts by OPEC (Organization of the Petroleum Exporting Countries).

Meanwhile, CNQ plans to invest around $5.2 billion this year to increase its production by 70,000 barrels of oil equivalent per day. Besides, the company has reduced its debt levels amid solid financials, which could lower its interest expense and boost profitability. The company’s financial position also looks healthy, with its liquidity at $6.1 billion at the end of the first quarter. So, considering all these factors, I believe CNQ is well-positioned to continue its dividend growth in the coming years.

goeasy

goeasy (TSX:GSY), which offers leasing and lending services to subprime customers, has paid dividends for 19 consecutive years. Meanwhile, the company has raised its dividends by an impressive CAGR of 30.9% over the last nine years, with its forward yield at 3.06%.

With the federal government indicating its intent to lower the maximum allowable annual percentage rate (APR) on loans to 35% from 47%, the company has lost around 13% of its stock value. It trades at an attractive NTM (next 12 months) price-to-earnings multiple of 8.9, making it an attractive buy.

Meanwhile, the subprime lender expects its loan portfolio to reach $5.1 billion by 2025, representing 70% growth from its current levels. The loan portfolio expansion could drive its financials, delivering an annual return on equity of over 22% until 2025. So, I believe goeasy is well-positioned to continue its dividend growth.  

BCE

With a forward dividend yield of 6.72% and an attractive NTM (next 12 months) price-to-sales multiple of 2.1, BCE (TSX:BCE) would be my final pick. Telecommunication service providers earn substantial revenue from recurring sources, thus delivering stable and predictable cash flows. Supported by stable cash flows, the company has raised its dividends by over 5% annually for the previous 15 years.

Meanwhile, the demand for telecommunication services is rising amid digitization and increased adoption of a hybrid work culture and online shopping. BCE continues to strengthen its 5G and broadband infrastructure amid growing demand. These initiatives could boost its financials in the coming quarters, thus allowing it to continue paying dividends at a healthier rate.

Should you invest $1,000 in H&R REIT right now?

Before you buy stock in H&R REIT, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and H&R REIT wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned. The Motley Fool recommends Canadian Natural Resources and Enbridge. The Motley Fool has a disclosure policy.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Dividend Stocks

Confused person shrugging
Dividend Stocks

Where to Invest $2,500 in the TSX Today

These TSX stocks offer attractive dividends and a shot at decent upside on a rebound.

Read more »

Pile of Canadian dollar bills in various denominations
Dividend Stocks

Invest $25,000 in These Dividend Stocks for $1,956.66 in Annual Passive Income

Dividends stocks can make a huge difference, even if shares don't move an inch. And these might be the best.

Read more »

Pile of Canadian dollar bills in various denominations
Dividend Stocks

Got $5,000? 5 Income Stocks to Buy and Hold Forever

These income stocks have a solid dividend-payout history that can help you earn stress-free passive income.

Read more »

grow money, wealth build
Dividend Stocks

Why I’d Invest $10,000 in This Undervalued Dividend-Growth Stock for Decades of Income

This undervalued dividend stock offers a high yield of over 8% and can help you earn more than $200 in…

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

Here’s Exactly How a $20,000 TFSA Could Potentially Grow to $200,000

Index funds like the iShares S&P/TSX Capped Composite Index (TSX:XIC) are tax free in a TFSA.

Read more »

Dividend Stocks

How I’d Invest $6,000 in Canadian Real Estate Stocks to Build Lasting Wealth

Canadian REITs on sale! See how grocery-anchored retail properties offering 9% yields could turn $6,000 into lasting wealth despite US…

Read more »

rain rolls off a protective umbrella in a rainstorm
Dividend Stocks

Economic Headwinds: Should You Still Consider Buying the Dip?

A market dip might seem like a bumpy road, but it can be far smoother in the future with the…

Read more »

e-commerce shopping getting a package
Dividend Stocks

Consumer Spending Plays Amidst the Current Market Dip

Consumption may go down in market dips, but certain consumer stocks are certainly better off than others.

Read more »