Investors can generate regular passive income, regardless of where the market goes. Thankfully, several Canadian companies are known for their solid dividend payment and growth history, even amid a tough operating environment.Â
So, for investors seeking worry-free passive income, I have shortlisted five stocks that have paid regular dividends for at least 25 years. Further, these Canadian companies have resilient earnings and cash flows, implying they could continue to boost shareholdersâ returns through solid dividend payments.Â
Canadian UtilitiesÂ (TSX:CU) has paid and increasedÂ its dividendÂ for 50 years. Its solid dividend payment and growth history make it a must-have passive-income stock in all market conditions. Its low-risk business, growing rate base, and sustainable payouts indicate that Canadian Utilities is well positioned to hike its dividend further.
Canadian Utilitiesâs regulated and contracted assets generate predictable cash flows that comfortably cover its payouts. Meanwhile, it offers a well-protected dividend yield of 4.4%.
Top CanadianÂ bank stocksÂ have a solid track record of dividend payments. Among the banking giants,Â ScotiabankÂ (TSX:BNS)(NYSE:BNS) has paid a dividend since 1833. Further, its dividend has grown at an annualized rate of 6% in the last decade. Its solid dividend payment history and ability to consistently increase its earnings (grew at a compound annual growth rate, or CAGR, of 5% since 2011) make it a solid stock for passive income.Â
Scotiabankâs exposure to high-growth banking markets, diversified revenue base, rising interest rate environment, and operating leverage will drive its earnings and dividend payments. Also, its high-quality assets and solid balance sheet bode well for growth. One can earn a lucrative dividend yield of 5.1% by investing in Scotiabank stock.
Bank of MontrealÂ (TSX:BMO)(NYSE:BMO) is another reliable stock for steady passive income. It has paid a dividend for 193 years — the longest track record of dividend payments among Canadian companies. Moreover, Bank of Montrealâs dividend increased at a CAGR of 4% in the past decade.Â
Bank of Montrealâs diversified revenue sources, ability to drive loans and deposits, and increase in interest rate support its earnings growth. Moreover, its solid asset base and improved efficiency will drive its earnings and dividend payouts. Bank of Montreal stock offers a dividend yield of 4.2%, which is safe.
FortisÂ (TSX:FTS)(NYSE:FTS) has paid and raised its dividend for 48 years. Its rate-regulated assets generate predictable cash flows that drive its dividend payments. Its solid capital program, growing rate base (expected to grow at a CAGR of 6%), and increase in renewable power-generation capacity augur well for future dividend growth.Â
Fortis sees a 6% annual growth in its dividend through 2025. Further, as almost all of its earnings come from regulated assets, its payouts are well protected. Fortis offers a dividend yield of 3.5%.Â
EnbridgeÂ (TSX:ENB)(NYSE:ENB) increased its dividend at a CAGR of 10 in the last 27 years. Further, it has paid a dividend for 67 years. Its diverse cash streams, high-quality renewable and conventional energy assets, multi-billion secured projects, solid backlogs, and inflation-protected earnings bode well for future growth.Â
Enbridge stock offers a dividend yield of more than 6%. Meanwhile, its target payout ratio of 60-70% of its distributable cash flows is sustainable in the long term.
The post The 5 Best TSX Dividend Stocks to Own for a Lifetime of Passive Income appeared first on The Motley Fool Canada.
Before you consider Bank of Montreal, you’ll want to hear this.
Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in August 2022 … and Bank of Montreal wasn’t on the list.
The online investing service they’ve run for nearly a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 27 percentage points. And right now, they think there are 5 stocks that are better buys.
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* Returns as of 8/8/22
Fool contributorÂ Sneha NahataÂ has no position in any of the stocks mentioned.Â The Motley Fool recommends BANK OF NOVA SCOTIA, Enbridge, and FORTIS INC.
By: Sneha NahataTitle: The 5 Best TSX Dividend Stocks to Own for a Lifetime of Passive IncomeSourced From: www.fool.ca/2022/08/23/the-5-best-tsx-dividend-stocks-to-own-for-a-lifetime-of-passive-income/Published Date: Tue, 23 Aug 2022 17:30:00 +0000