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

These four Canadian stocks with high dividend growth could boost your passive income while stabilizing your portfolio.

| More on:

Dividend stocks tend to outperform the broader equity markets in the long term. Supported by solid underlying businesses and stable cash flows, these stocks reward their shareholders through regular payout. So, they provide a steady passive income and stability to investors’ portfolios. Having seen the benefits of dividend stocks, here are four top Canadian stocks with high dividend growth that you can buy right now.

Enbridge

Enbridge (TSX:ENB) operates a low-risk midstream energy business, with only 2% of its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) impacted by commodity price fluctuation. So, the company’s cash flows are predictable, thus allowing it to raise its quarterly dividends at a CAGR (compound annual growth rate) of over 10% for the previous 28 years. Currently, its forward yield stands at an attractive 7.75%.

Further, the midstream company acquired three gas utility facilities in the United States for around $19 billion last week. The acquisition could substantially boost its cash flows, thus strengthening its long-term dividend growth. The company has a healthy pipeline of secured growth projects, which could also support its financial growth in the coming years. So, given its healthy growth prospects and solid underlying businesses, I believe Enbridge is well positioned to maintain its dividend hikes in the coming years.

Canadian Natural Resources

Canadian Natural Resources (TSX:CNQ) owns and operates a diversified portfolio of oil and natural gas-producing assets across North America, the North Sea, and Africa. Given its low-decline, long-life asset base, the company generates stable free cash flows even in a lower-price environment, thus allowing it to maintain its dividend growth. The oil and natural gas producer has raised quarterly dividends for the previous 23 years at an annualized growth rate of 21%, while its forward yield stands at a healthy 4.18%.

Further, analysts are projecting oil prices to remain elevated in the near to medium term. The company is strengthening its asset base by investing $5.4 billion this year. Supported by these investments and solid organic growth, the company’s management hopes to increase its total production by 5.5% this year. So, with a higher realization price and increased production, I expect CNQ to continue with its dividend growth.

goeasy

Third on my list is goeasy (TSX:GSY), which provides leasing and lending services to subprime customers. The company has been growing its topline and adjusted EPS (earnings per share) at a CAGR of 17.7% and 29.5%, respectively. These strong performances have led the company to raise its dividends at an annualized rate of over 30% for the last nine years, with its forward yield currently at 3.16%.

Meanwhile, the subprime lender is also working on mitigating the impact of lowering the maximum allowable interest rate through products and pricing enhancements. The company’s management projects its loan portfolio to grow by 60% to $5.1 billion by 2025. The expansion of the loan portfolio could drive its cash flows, thus making its future payout safer.

Pizza Pizza Royalty

When many restaurants are struggling due to the inflationary environment, Pizza Pizza Royalty (TSX:PZA) has raised its monthly dividends seven times since March 2020. Given its highly franchised business model, rising prices and wage inflation have not hurt its royalty income. Meanwhile, the company continues to deliver strong financials as its menu innovations, promotional activities, and value messaging have boosted its same-store sales and royalty income.

The company has planned to increase its restaurant network by 3-4% this year and is also focusing on renovating its old restaurants. So, I expect the company’s royalty income to grow, thus allowing the management to reward its shareholders by paying dividends at a healthier rate. Currently, the company pays a monthly dividend of $0.075/share, with a forward yield of 6.28%.

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.

More on Dividend Stocks

profit rises over time
Dividend Stocks

These 2 Dow Stocks Are Set to Soar in 2025 and Beyond

Two Dow Jones stocks are screaming buys but Canadians must hold them in an RRSP or RRIF to avoid paying…

Read more »

TFSA (Tax free savings account) acronym on wooden cubes on the background of stacks of coins
Dividend Stocks

How to Use Your TFSA to Earn Ultimate Passive Income

If you have a TFSA, then you have the key to creating ultimate passive income. All you need is a…

Read more »

Confused person shrugging
Dividend Stocks

Better Buy: Fortis Stock or Hydro One Stock?

Let's do a compare and contrast of these two top utilities stocks right now, shall we?

Read more »

A close up color image of a small green plant sprouting out of a pile of Canadian dollar coins "loonies."
Dividend Stocks

Boost Your Passive Income: 2 Canadian High-Yielders at a Bargain

Nutrien (TSX:NTR) stock and another play that appear like fantastic dividend bargains in mid-November.

Read more »

3 colorful arrows racing straight up on a black background.
Dividend Stocks

TSX Stocks Soaring Higher With No Signs of Slowing

Three TSX stocks continue to beat the market and could soar higher in an improving investment landscape.

Read more »

Hourglass and stock price chart
Dividend Stocks

Goeasy Stock: Is It Heading for a 52-Week High?

Goeasy stock has been edging higher, especially after another record-setting earnings report. So are 52-week highs in sight?

Read more »

Piggy bank with word TFSA for tax-free savings accounts.
Dividend Stocks

Here’s the Average TFSA Balance at Age 44 in Canada

You can invest your TFSA in funds like the BMO Canadian High Yield Dividend ETF (TSX:ZDV) to grow the balance.

Read more »

Electricity transmission towers with orange glowing wires against night sky
Dividend Stocks

The Best Telecom Stock to Buy Before 2025

Choosing the safest stock from a decimated sector can be tricky, but if there is a reasonable chance of full…

Read more »