While the market remains volatile amid trade tensions and fear of an economic slowdown, the best Canadian dividend stocks appear as reliable investment options. These stocks provide steady cash flow to investors and help anchor portfolios against market fluctuations.
While the TSX has several high-quality dividend stocks, some are hard to ignore, given their high and reliable yields and ability to increase their dividends consistently.
Against this background, here are three Canadian dividend stocks with fundamentally strong businesses you can’t ignore. These stocks are most likely to pay and increase their dividends no matter where the market moves.
Source: Getty Images
Enbridge
Enbridge (TSX:ENB) is one of the best Canadian dividend stocks you can’t ignore. This integrated energy infrastructure company has consistently paid dividends for about seven decades and increased the same for 30 consecutive years. While it has returned significant cash to its shareholders, it currently offers an attractive yield of 6.1%.
Enbridge’s diversified energy infrastructure assets, high system utilization, contractual arrangements, and regulated cost-of-service tolling frameworks enable it to generate resilient earnings and distributable cash flow (DCF) per share in all market conditions. This resilience allows it to deliver higher dividend payments.
Looking ahead, Enbridge forecasts its DCF per share to increase at a mid-single-digit rate in the long run. Moreover, its dividend is likely to grow in line with its DCF per share.
Enbridge’s thriving core liquid pipelines business, low-cost expansion opportunities, secured capital projects, and strategic acquisitions will support its higher future payouts. Further, Enbridge is well-positioned to capitalize on the shift towards green energy with its expanding renewable energy portfolio. Moreover, the expansion of its utility-like infrastructure will enable it to generate predictable cash flows, supporting higher dividend payments in the coming years.
Canadian Utilities
Canadian Utilities (TSX:CU) is another attractive dividend stock you can’t ignore. This utility company operates a defensive business and is known for its solid history of dividend growth and durable payouts. The company’s rate-regulated asset base helps generate predictable cash flows in all market conditions, supporting its dividend payments and growth.
For instance, Canadian Utilities has increased its dividends for 52 consecutive years, the longest streak of dividend growth by any publicly traded company in Canada. This reflects the resilience of its business model, its ability to consistently increase its earnings and cash flows, and its focus on rewarding its shareholders with higher cash. Besides stress-free dividends, this utility stock offers a compelling yield of 5.1%.
Looking ahead, Canadian Utilities’s ongoing investments in its regulated assets will expand its rate base, enabling it to generate strong cash flows, which will, in turn, support future dividend increases.
Bank of Montreal
Investors seeking the best Canadian dividend stocks should not ignore top Canadian bank stocks. Canada’s leading financial services companies have a stellar track record of dividend distribution for decades, making them a compelling option for generating worry-free income.
Bank of Montreal (TSX:BMO) is one such financial giant known for its unmatched history of dividend payments. Notably, this banking giant has paid dividends for an impressive 196 consecutive years — the longest streak of dividend payments by any publicly traded Canadian company. Moreover, this financial services company has consistently rewarded its shareholders with higher annual payouts. For instance, BMO has steadily increased its dividend at an average annualized growth rate of 5.4% in the last 15 years.
BMO’s diversified revenue streams, including high‐return wealth business, and ability to expand its loan book and deposit base drive its financials. Further, its focus on improving operational efficiency, solid credit performance, and reducing non-interest expenses position it well for sustained earnings growth. The bank anticipates high single-digit earnings growth over the medium term, likely supporting further dividend increases. Moreover, it currently offers an attractive yield of 4.6%.
