Investors seeking to bolster their passive income and build substantial wealth over the long term could consider Canadian dividend-paying stocks with strong growth potential. Dividend stocks, particularly those with solid fundamentals and a history of increasing payouts, can offer financial security and long-term wealth creation. Notably, these dividend stars reward investors with regular cash flow while positioning themselves for future growth, making them attractive choices for those seeking income and capital gains.
Against this background, here are two Canadian dividend stars set for strong returns.
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Canadian Natural Resources stock
Canadian Natural Resources (TSX:CNQ) is one of the top investments for generating consistent income and solid capital gains. The company’s high-quality assets, ability to increase production, and strong earnings base position it well to reward its shareholders with higher dividends and significant capital gains.
This Canadian oil and gas producer increased its dividend twice in 2024. Overall, it has raised its dividend consistently for 25 years. Moreover, its dividend grew at a compound annual growth rate (CAGR) of 21% during that period. The energy giant currently offers a dividend of $0.5625 per share, reflecting a yield of 5.6%. Besides solid dividends, Canadian Natural Resources stock has grown at a CAGR of 26.7% over the past five years, delivering a stellar capital gain of 226.5%.
The company’s financials are supported by strong production growth and high-quality assets. Further, its diversified production mix provides operational flexibility and stability, ensuring resilience in fluctuating commodity markets. Additionally, most of its liquid production comes from long-life, low-decline assets, including zero-decline, high-value synthetic crude operations. This structure generates steady cash flow while keeping reserve replacement costs low.
With a planned capital budget of around $6 billion for 2025, Canadian Natural Resources expects to increase its annual production by approximately 12%. Key acquisitions, such as the Athabasca Oil Sands Project (AOSP) and Duvernay assets, will be instrumental in driving this expansion.
Moreover, with a vast inventory of low-capital projects and a strong balance sheet, Canadian Natural Resources remains well-positioned to capitalize on market opportunities while rewarding investors through consistent dividend growth and share buybacks. While the stock could see short-term volatility, this energy giant is poised to deliver solid total returns in the long term.
goeasy stock
Investors looking for steady dividend income and solid growth could add goeasy (TSX:GSY) stock to their portfolios. This leading financial services company provides loans and leasing services to nonprime borrowers. Thanks to the large subprime lending market, its wide product range, omnichannel offerings, and solid credit underwriting capabilities, goeasy consistently delivers solid revenue and earnings. Its solid financials drive its share price and dividend payouts.
goeasy’s top line has grown at a CAGR of 20.1% in the last five years. Further, its bottom line grew at a CAGR of 28.1% during the same period. Its solid financials supported its share price, which increased at a CAGR of 23.4% in the last five years and gained nearly 186%.
Recently, goeasy announced a 25% increase in its annual dividend to $5.84 per share. This was the company’s 11th consecutive year of dividend growth. Further, goeasy stock offers a decent yield of about 3.7% based on its closing price of $157.76 on March 7.
Looking ahead, goeasy’s leadership in the Canadian subprime lending market, diversified funding sources, geographic expansion, steady credit performance, and operational efficiency will drive its top and bottom line at a solid pace. This will support goeasy’s higher dividend payments and enable it to deliver above-average returns.
