Dividend-paying companies are attractive investments for investors looking for stable income and sustained long-term growth. These Canadian dividend-paying stocks are backed by companies with strong fundamentals and a commitment to delivering shareholder value even in difficult market conditions, increasing the income potential of your portfolio.
Against this backdrop, let's look at some high-quality Canadian stocks that consistently pay and increase their dividends. These payouts reflect their financial strength, operational stability, and commitment to generating shareholder value.
Before looking at specific stocks, it is crucial to recognize the importance of diversification when building a dividend-focused portfolio. Having exposure to different sectors is essential to minimize risk and maximize income.
Strong
Speaking of dividend powerhouses, Strong (TSX:FTS) stands out for its excellent track record of dividend payments and growth, and the sustainability of its payouts. The Canadian utility giant has a defensive, regulated electric utility business that consistently generates predictable and growing cash flow to support its payouts.
Thanks to its low risk and growing cash flows, Fortis has increased its dividends for 50 consecutive years, demonstrating the strength of its business model and management's commitment to maximizing shareholder value.
Fortis is well positioned to continue to grow its dividend and return large amounts of cash to its shareholders. The company is investing to expand its regulated rate base, which will boost its earnings and support higher payouts.
Fortis management expects the company’s rate base to expand at an average annualized growth rate or CAGR of 6.3% through 2028 and reach $49.4 billion from $37 billion in 2023. This will enable the company to expand its earnings and dividend payments. Fortis’ dividends are projected to grow at a CAGR of 4-6% over the same period.
In summary, Fortis is a reliable bond stock. Its payments are well covered and it offers a reliable yield of around 3.9%.
Enbridge
Enbridge (TSX:ENB) is one of the best stocks to increase the income potential of your overall portfolio. The energy infrastructure company consistently improves value for its shareholders through higher dividend payments, regardless of commodity cycles.
Enbridge transports oil and gas, and its extensive pipeline network benefits from high utilization, which supports its earnings and distributable cash flow (DCF). In addition, its diversified asset base, long-term contracts, power purchase agreements, and focus on generating utility-like revenues boost its finances and dividend payout.
Thanks to rising earnings and discounted cash flow per share, Enbridge has consistently increased its dividend for 29 consecutive years. What's more, the energy giant is well positioned to increase its dividend in the years ahead.
Enbridge continues to invest in conventional and low-carbon energy assets, which positions it well to capitalize on energy demand. In addition, its strategic acquisitions and approximately $24 billion project pipeline provide a strong foundation for future earnings per share and discounted cash flow growth.
Enbridge expects its earnings and discounted cash flow per share to grow at a mid-single-digit rate over the long term, providing a solid foundation for future dividend growth. The stock currently offers a high yield of 6.7%, while its dividend payments are sustainable.