Investors seeking worry-free or relatively safe passive income could consider dividend stocks with the potential to sustain and increase payouts for years under all market conditions. Thankfully, the TSX has several such fundamentally strong companies committed to returning cash to their shareholders via higher dividend payments.
With this background, here are three Canadian stocks that could help you create a durable passive income portfolio with just $10,000. These stocks have relatively resilient business models and a growing earnings base and are known for their resilient payouts.
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Enbridge
Speaking of safe dividend stocks, Enbridge (TSX:ENB) could be a reliable bet. This energy company has uninterruptedly paid dividends for over 69 years. Moreover, it raised its dividend for 29 years. The durability of its payouts reflects the company’s resilient business model, highly diversified revenue streams, a growing earnings base, and the ability to generate solid distributable cash flows (DCFs).
Enbridge is well-positioned to capitalize on growing energy demand through its high-quality infrastructure assets and continued investments in conventional and renewable energy sources. Further, the company’s high asset utilization rate, long-term contracts, power-purchase agreements, and multi-billion-dollar secured capital projects will likely drive its DCF per share and payouts.
Enbridge’s management remains committed to rewarding its shareholders through higher dividend payouts. The company’s EPS and DCF per share are projected to increase at a mid-single-digit rate in the long term. This could lead to low-to-mid-single-digit growth in its dividend in the upcoming years. Besides solid dividends, Enbridge offers an attractive yield of 7.7% (based on the closing price of $47.57 on June 19).
Fortis
Utility companies are famous for offering dependable dividends. Their resilient payouts reflect a defensive business model and ability to generate predictable cash flows. Among top utility companies, Fortis (TSX:FTS) stands out for its stellar dividend payment history. It boasts a dividend growth history of 50 years and plans to increase it at a mid-single-digit rate in the upcoming years. Moreover, it offers a well-protected yield of 4.5%.
This electric utility company’s resilient business model and growing rate base will help it generate solid cash flows. Further, as Fortis generates most of its earnings through regulated assets, its payouts are well-covered and reliable.
Fortis continues investing in regulated utility assets, which will likely expand its rate base and future earnings. Fortis plans to expand its rate base at a CAGR of 6.3% through 2028, enabling it to enhance shareholders’ returns through higher dividend payments.
Bank of Montreal
Passive income investors can rely on leading Canadian bank stocks. Top banks in Canada are famous for paying dividends for over a century. Bank of Montreal (TSX:BMO) is one among them, which makes it an attractive stock for earning safe passive income over the next decade.
This financial services company has the longest record of dividend payments in Canada. Indeed, it has paid dividends for over 195 years. Moreover, the financial services company increased its dividend at a CAGR of 5% in the past 15 years.
Over the medium term, Bank of Montreal expects its earnings to increase at a CAGR of 7 to 10%, enabling it to grow its dividend at least at a mid-single-digit rate during the same period. The bank’s diversified revenue base, expansion of its loan portfolio, solid deposit base, and focus on improving efficiency will enable it to grow its earnings and dividend payments. Bank of Montreal stock offers a lucrative dividend yield of about 5.4%.
