Dividend powerhouses are compelling investments for investors seeking stable income and steady long-term growth. These Canadian dividend stocks are backed by fundamentally strong businesses and a commitment to delivering value to shareholders, even in challenging market conditions, thus boosting the income potential of your portfolio.
Against this background, let’s explore a few high-quality Canadian stocks that consistently pay and increase dividends. These payouts reflect their financial strength, operational stability, and commitment to returning value to shareholders.
Before I dive into specific stocks, it’s crucial to recognize the importance of diversification when building a dividend-focused portfolio. It’s essential to have exposure to different sectors to minimize risk while maximizing income.
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Fortis
Speaking of dividend powerhouses, Fortis (TSX:FTS) stands out for its stellar dividend payment and growth history, and the sustainability of its payouts. The Canadian utility giant owns a defensive, regulated electric utility business that consistently generates predictable and growing cash flow to support its payouts.
Thanks to its low-risk and growing cash flows, Fortis has increased its dividends for 50 years in a row. This shows the strength of its business model and management’s commitment to maximizing shareholder value.
Fortis is well-positioned to grow its dividends further and return high cash to its shareholders. The company is investing to expand its regulated rate base, which will boost its earnings and support higher payouts.
Fortis’ management expects the company’s rate base to expand at an average annualized growth rate or CAGR of 6.3% through 2028 and reach $49.4 billion from $37 billion in 2023. This will enable the company to expand its earnings and dividend payments. Fortis’ dividends are projected to increase at a CAGR of 4-6% during the same period.
In summary, Fortis is a reliable income stock. Its payouts are well-covered, and it offers a reliable yield of about 3.9%.
Enbridge
Enbridge (TSX:ENB) is a top stock to boost the income potential of your overall portfolio. The energy infrastructure company consistently enhances its shareholders’ value through higher dividend payments regardless of commodity cycles.
Enbridge transports oil and gas, and its extensive pipeline network benefits from high utilization, which supports its earnings and distributable cash flow (DCF). Moreover, its diversified asset base, long-term contracts, power purchase agreements, and focus on generating utility-like revenues drive its financials and dividend payments.
Thanks to its growing earnings and DCF per share, Enbridge has consistently increased its dividend for 29 consecutive years. Further, the energy giant is well-positioned to grow its dividends in the upcoming years.
Enbridge continues to invest in conventional and low-carbon energy assets, which positions it well to capitalize on energy demand. Moreover, its strategic acquisitions and project backlog of about $24 billion provide a solid foundation for future EPS and DCF growth.
Enbridge expects its earnings and DCF per share to grow at a mid-single-digit rate in the long term, providing a solid base for future dividend growth. The stock currently offers a high yield of 6.7%, while its dividend payouts are sustainable.
