3 Must-Have Canadian Dividend Stocks for Every Investor

These Canadian stocks have a long history of consistently paying and increasing dividends, making them reliable choices for earning passive income.  

Dividend stocks with relatively safe payouts can help you earn worry-free passive income for decades. The Toronto Stock Exchange (TSX) has several strong companies known for consistently maintaining and growing their dividends through various market conditions. These dividend-paying stocks have solid business models, growing earnings, and reliable cash flows, making them a dependable source of passive income. 

Here’s a look at three safe Canadian stocks that everyone should consider. These companies are well-positioned to sustain and potentially increase their dividends in the coming years. 

 1. Enbridge (TSX:ENB)  

Enbridge is a leading Canadian stock known for its relatively secure dividend. With over 69 years of dividend payments and 29 consecutive years of increases, the company demonstrates a strong commitment to shareholder value. Its dividend has grown at a compound annual growth rate (CAGR) of 10%. 

Enbridge’s robust business model enables it to produce substantial earnings and discounted cash flows (DCF), which support its generous dividend payouts. The company's diversified revenue sources, long-term contracts, power-purchase agreements, and high asset utilization contribute significantly to its earnings and cash flow stability. 

Looking ahead, Enbridge is focused on enhancing shareholder returns, with expectations for its earnings per share (EPS) and Discounted cash flow (DCF) per share to grow at a CAGR of around 5% over the long term. This growth could lead to a modest increase in its dividend in the coming years. Additionally, Enbridge maintains a sustainable payout ratio target of 60 to 70% of DCF. The stock currently offers an attractive yield of 7.3%, based on its closing price of $50.17 as of July 19. 

2.Canadian Utilities (TSX:CU) 

Canadian Utilities is a solid choice for investors seeking dependable dividend income. The company has an impressive track record of paying dividends for 52 consecutive years, the longest streak among publicly traded Canadian firms. 

Thanks to its robust business model and steady cash flows, Canadian Utilities is well-positioned to maintain and grow its dividends regardless of market conditions. Its expanding rate base enhances earnings and cash flow, reinforcing its dividend payments. Currently, the stock offers a high yield of 5.9%. 

Looking forward, Canadian Utilities is dedicated to growing its rate base through investments in regulated utility assets. These investments will bolster its earnings and safeguard its dividend payouts. Additionally, the company’s focus on commercially secured energy infrastructure projects supports future growth and ensures continued dividend stability. 

3. Toronto-Dominion Bank (TSX:TD) 

Toronto-Dominion Bank stands out as a top Canadian bank for those seeking reliable dividend income. With a remarkable history of approximately 167 years of consistent dividend payments, this financial services powerhouse has also increased its dividend at a compound annual growth rate (CAGR) of around 10% since 1998. This makes it a dependable choice for income-focused investors. 

Toronto-Dominion Bank maintains a low payout ratio of 40 to 50%, indicating that its dividend distributions are sustainable in the long run. Currently, the bank provides an attractive yield of 5.1%.