The Top 5 Canadian Dividend Stocks I Think Belong in Everyone’s Portfolio

Many TSX-listed stocks pay dividends. However, only a select few have managed to maintain and even increase their distributions for years, regardless of economic downturns and market volatility. These are primarily large-cap companies with a resilient business model and steady earnings growth supporting their payouts. Given their sustainable payouts and ability to increase dividends year after year, these Canadian stocks belong in the portfolio of anyone seeking worry-free passive income.

Against this backdrop, here are the top five Canadian dividend stocks to buy right now.

Fortis stock

Fortis (TSX:FTS) is a rock-solid Canadian dividend stock for stress-free passive income. This utility company operates a defensive business model built around rate-regulated cash flows. This implies that its earnings are steady and predictable, even when markets turn volatile. Thanks to its steady cash flow growth, Fortis has raised its dividend for 51 consecutive years.

Fortis focuses primarily on the transmission and distribution of electricity and natural gas. These segments are relatively stable, providing a steady stream of revenue regardless of energy price swings. This insulation from market volatility helps ensure that shareholders continue receiving dependable, growing dividends.

Fortis’s multi-billion-dollar capital program is expected to expand its rate base by about 6.5% annually through 2029. As the rate base grows, its earnings will expand, paving the way for continued dividend increases. Management projects annual dividend growth of 4% to 6% per year through 2029.

In addition, rising electricity demand, driven by manufacturing and data centres, provides a solid base for future growth, supporting its payouts.

Enbridge stock

Enbridge (TSX:ENB) is one of Canada’s most dependable dividend stocks. Its diversified operations, including oil and gas pipelines, natural gas utilities, and renewable energy projects, position it well to generate strong earnings and distributable cash flow (DCF) in all market conditions. Its earnings are primarily supported by regulated or long-term contracts and low-risk commercial arrangements, ensuring steady growth even during market turbulence.

The company has paid dividends for over 70 years and increased them annually for 30 consecutive years. The energy infrastructure company’s dividend has grown at a compound annual growth rate (CAGR) of 9%. Enbridge maintains a sustainable payout ratio of 60–70% of DCF and offers a high and reliable yield of 5.7%.

Enbridge is likely to benefit from its extensive pipeline network, high utilization of its assets, and long-term, take-or-pay contracts. Moreover, rising energy demand from data centres and its growing portfolio of renewable energy assets augur well for future growth.

Canadian Natural Resources stock

Canadian Natural Resources (TSX:CNQ) is a high-quality dividend stock for your portfolio. This oil and gas producer has a history of growing its dividend at a solid pace. Moreover, it is well-positioned to pay and increase its dividends in the coming years.

The energy producer has uninterruptedly increased its dividend for 25 consecutive years. Moreover, CNQ’s dividend has risen at a CAGR of 21% over that period.

Canadian Natural’s production is diversified across multiple crude oil grades, natural gas, and natural gas liquids (NGLs), allowing management to allocate capital efficiently depending on market conditions. While much of its production is rooted in Canada, it also benefits from international exposure through operations in the UK’s North Sea and offshore Africa.

This combination of geographic and product diversification gives Canadian Natural the flexibility to focus investment where returns are strongest.  As a result, the company is well-positioned to sustain its payouts.

The final two dividend stocks to add to your portfolio

Beyond Fortis, Enbridge, and Canadian Natural Resources, TC Energy (TSX:TRP) and Telus (TSX:T) stand out as top Canadian dividend stocks.  TC Energy has raised its dividend for 25 consecutive years, backed by stable, regulated assets and long-term contracts that support steady cash flow. The company targets 3–5% annual dividend growth over time.

Telus, meanwhile, continues to impress with 27 dividend hikes since 2011. With a plan to grow payouts by 3–8% annually through 2028, the telecom leader offers reliable income potential for investors seeking stability and consistent returns in their portfolios.

The post The Top 5 Canadian Dividend Stocks I Think Belong in Everyone’s Portfolio appeared first on The Motley Fool Canada.

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Fool contributor Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool recommends Canadian Natural Resources, Enbridge, Fortis, and TELUS. The Motley Fool has a disclosure policy.

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