Top-quality TSX dividend stocks are a compelling investment for generating steady passive income. These stocks provide a steady income stream and have a track record of consistently growing their payouts over time. Further, you don’t need a large amount of cash to begin investing. In fact, with as little as $200, you can buy shares of fundamentally strong companies that can pay and grow dividends for decades. These “no-brainer” dividend stocks are compelling investments to start a growing passive income stream.
Against this backdrop, let’s look at three no-brainer Canadian dividend stocks to buy with $200 right now.
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Enbridge stock
Speaking of no-brainer stocks, Enbridge (TSX:ENB) is a must-have for generating worry-free dividend income. This energy infrastructure company is known for its resilient payouts, consistent dividend growth, and high yield.
For instance, the energy company has paid dividends for over 69 years and raised its dividend for 29 consecutive years. Notably, Enbridge paid and increased its dividend during the COVID-19 pandemic when most energy companies either paused or announced a cut to their payouts. Its highly diversified revenue base, long-term contracted cash flows, power purchase agreements, and arrangements to lower commodity price exposure enable Enbridge to steadily increase its earnings and distributable cash flow (DCF) per share, which supports its payouts.
The company’s solid fundamentals, investments in conventional and renewable energy sources, acquisitions, and multi-billion capital projects are likely to drive its earnings and DCF per share at a mid-single-digit rate over the long term. This will help Enbridge continue increasing its dividend every year.
BCE stock
BCE (TSX:BCE) is another reliable dividend stock to buy now for a steady income and an ultra-high yield. This leading Canadian communication company has raised its dividend for 16 consecutive years and offers a compelling yield of 8.6% near the current price levels.
The company’s ability to profitably expand its user base, focus on high-growth segments, and cost reduction measures enable it to consistently generate solid earnings, which support its higher payouts.
BCE could continue to increase its dividends and return higher cash to its shareholders. Its fast 5G mobile services, extensive broadband fibre network, and efficient promotions will help drive its user growth. Moreover, the telecom company is diversifying its top line and expanding into high-growth avenues such as cloud computing, digital advertising, and cybersecurity services. All these measures will support its financials and dividend payouts.
Hydro One stock
Hydro One (TSX:H) is a no-brainer stock for income investors. It provides electricity transmission and distribution services, but unlike many utility companies, it doesn’t generate power or have exposure to fluctuating commodity prices. This unique business model allows the company to generate steady earnings and consistent cash flows – perfect for supporting its dividends.
The utility company’s regulated assets account for 99% of income, implying that its payouts are relatively safe and reliable. Hydro One’s solid financials enable it to self-fund growth initiatives, reducing its dependence on additional external capital.
Looking ahead, Hydro One’s rate base is forecasted to grow by 6% annually through 2027. The growing rate base will help the company to expand its earnings by 5–7% per year and increase its dividend by 6% during the same period.
In summary, Hydro One’s low-risk cash flows, growing rate base, and visibility over future dividend growth make it an attractive stock for dividend investors.
