Investing in top dividend stocks that consistently increase their annual payouts can provide a reliable source of passive income that grows over time. Fortunately, several Canadian stocks are famous for their solid track record of dividend payments and annual increases. These companies have well-established businesses with solid fundamentals and a growing earnings base.
In this context, here are the top stocks with solid dividend-growth potential.
Canadian Natural Resources
If you’re looking for a reliable stock with solid dividend-growth potential, Canadian Natural Resources (TSX:CNQ) is worth considering. As one of Canada’s leading oil and natural gas producers, this company is known for rewarding its shareholders with consistent dividend increases.
Canadian Natural Resources has a remarkable history of increasing dividends for 24 consecutive years. During this period, its dividend grew at a compound annual growth rate (CAGR) of 21%, showcasing its ability to increase payouts in all market conditions. Currently, it offers a solid dividend yield of 4.8%, making it a compelling stock for income-focused investors.
Canadian Natural Resources’s diverse asset base, high-value reserves, ability to grow production, and low maintenance costs position it well to consistently grow its earnings. Furthermore, its disciplined approach to capital allocation and solid balance sheet enhance its capabilities to invest in growth initiatives, potentially leading to higher earnings and dividend payments in the future.
TC Energy
TC Energy (TSX:TRP) is a valuable income stock offering visibility over its future payouts. This energy infrastructure company earns a substantial part of its earnings through low-risk, rate-regulated assets and long-term contracts, adding stability to its financials. Its ability to consistently grow its earnings has allowed TC Energy to reward its shareholders with increasing dividend payments over the years.
The energy company has raised its dividend for 24 consecutive years, with an annual growth rate of 7%. TC Energy aims to continue this trend, targeting a 3-5% yearly dividend increase. With a current yield of over 6%, TC Energy is a dependable stock for generating solid passive income.
TC Energy’s diversified portfolio and utility-like revenue model lead to stable earnings growth. This stability positions the company to continue enhancing shareholder returns through growing dividends. Moreover, TC Energy is well-positioned for future growth due to its high asset utilization and strong demand for its services.
Further, its investments in low-carbon energy solutions also align with broader energy trends, supporting long-term expansion. Additionally, the company’s strategic focus on optimizing its portfolio, including the spinoff of its Liquids Pipelines business, is expected to improve financial performance and drive dividend growth.
In summary, TC Energy is a reliable investment for those seeking a growing passive-income stream.
Fortis
Canadian utility giant Fortis (TSX:FTS) stock should be on your radar for a steady source of growing dividend income. The regulated electric utility has an exceptional history of raising its dividends—50 years. This impressive streak shows the stability of its business model and strong financial performance.
The company operates in the regulated electric utility sector and is known for its defensive and predictable cash flows. This resilience allows Fortis to reward its shareholders with higher cash dividends.
Fortis plans to boost its dividend by 4-6% annually through 2028. This growth will be supported by Fortis’s strategy to expand its rate base—a key driver of earnings. With a $25 billion capital investment plan, the company is investing heavily to grow its rate base at a CAGR of 6.3%, supporting future growth and further increasing the potential for higher dividends.
Overall, Fortis’s long history of dividend increases, stable business model, and visibility over future dividends make it a compelling investment to start a passive-income stream.
