Dividend stocks are one of the best ways to put your hard-earned money back to work for you and invest for the long haul to take advantage of the power of compounding.
Not only do dividend stocks consistently return cash to investors, earning you an immediate return, but many dividend stocks also have a strong track record of success, in addition to having the potential to gain value as well.
Many dividend stocks are highly reliable since they not only need to consistently generate a profit in order to fund the dividend, but they also need to earn more cash flow than is needed to reinvest in the business.
Therefore, the dividend stocks that not only increase their dividends, but actually do so every single year are certainly some of the best long-term investments to consider.
So, with that in mind, if you’re looking for high-quality passive income generators to buy now and hold for years, here are three of the best dividend stocks in Canada that could also hike their dividend before the end of the year.
Two top utility stocks for passive income seekers
It’s no secret that utility stocks are some of the best and most reliable dividend stocks to buy and hold for years. That’s why two of the best dividend growth stocks to buy on the TSX are Fortis (TSX:FTS) and Emera (TSX:EMA).
In fact, both utility stocks are unsurprisingly on the Canadian dividend aristocrats list. Emera is currently on a 16-year dividend streak, showing an impressive track record of consistent dividend growth.
Meanwhile, Fortis has the second longest dividend growth streak of any company in Canada, at an incredible 50 straight years.
The reason these stocks are so reliable and such excellent passive income generators is due to the importance of utilities and the fact that their operations are regulated by governments.
Not only do Fortis and Emera both offer services that are incredibly important and highly recession-resistant, but because they are regulated by governments, their future revenue, earnings, and cash flow are typically highly predictable.
This not only adds to their reliability but also allows management to continue increasing the dividend every single year.
Plus, both Fortis and Emera own utility operations in several different jurisdictions, helping to mitigate even more risk and making these some of the best and most reliable stocks on the market.
Right now, Fortis stock offers a yield of roughly 3.9% and usually increases its dividend in the final few months of the year, making it primed for a dividend hike in the next few months.
Meanwhile, Emera offers a current dividend yield of 5.6% and typically increases its dividend in October or November, toward the end of each year.
So, if you’re looking for a high-quality dividend stock to generate significant and growing passive income for years to come, both Fortis and Emera are certainly two of the best on the TSX.
One of the best Canadian dividend stocks to buy and hold long term
In addition to high-quality utility stocks like Fortis and Emera, top-notch telecommunication stocks like Telus (TSX:T) are also excellent dividend growth stocks.
Although the industry isn’t as reliable, considering that utilities are some of the most reliable businesses on the market, high-quality telecommunication stocks are still attractive investments for several reasons.
First off, the services they offer are basically essential and only continue to become more important as technology increases and society continues to rely more on communications and the internet for productivity.
In addition, the long-life assets these stocks own allow them to generate significant free cash flow every quarter, which can be used to invest in future growth or returned to investors through dividends.
In fact, over the last few years Telus has actually been increasing its dividend twice a year as it continues to expand its business and generate significant cash flow.
Since 2020, Telus has increased its dividend in June and December every year, and today, it offers investors an incredible yield of 6.9%.
So, if you’re looking for a high-quality dividend growth stock to buy now and hold for years, Telus is certainly one of the best options Canadian investors have on the TSX.
