Top Canadian dividend stocks are attractive investments that could continue to pay you year after year. For instance, several TSX stocks have been rewarding investors with consistent dividend payments for years. Even during difficult operating periods, several of these businesses have maintained and increased their dividends, making them dependable options for generating passive income.
Against this background, here are three TSX stocks built to pay you year after year. Backed by solid fundamentals, steady earnings, and sustainable payout ratios, these Canadian dividend stocks offer the potential for dependable and growing income over the long term.
Bank of Montreal (TSX:BMO) is one of the top TSX stocks built to pay you year after year. The Canadian financial services giant has paid dividends without interruption for 197 years. The bank’s distribution history shows the resilience of its earnings, the sustainability of its payouts, and management’s focus on returning cash to its shareholders.
It recently hiked its quarterly dividend to $1.67 per share, up 5% from a year earlier. Over the past 15 years, BMO has grown its dividend by about 5.7% annually.
BMO’s diversified business model, focus on improving operating efficiency, solid credit quality, and a strong balance sheet will drive its earnings and dividend payments in the years ahead. At the same time, ongoing investments in technology and artificial intelligence will boost efficiency. By streamlining costs and deepening client relationships, these initiatives should further strengthen its earnings power, supporting BMO’s capacity to sustain and grow its dividend over time.
Hydro One (TSX:H) is another compelling stock that could pay you year after year. The company operates a regulated utility business, which enables it to deliver predictable, growing cash flow to support its payouts. Further, Hydro One focuses on regulated electric power transmission and local distribution and has no exposure to fluctuating commodity prices and risks associated with generation assets.
Hydro One’s payouts are driven by its growing rate base with no external equity funding. Between 2016 and 2022, the company increased its dividend by approximately 5% annually, with growth accelerating to roughly 6% in recent years. Looking ahead, management expects the rate base to grow at about 6% annually through 2027. That expansion should translate into 6–8% annual earnings growth and 6% annual dividend growth.
Hydro One’s solid balance sheet and ability to fund its capital expenditures through internally generated cash flow limit reliance on external financing. Moreover, its ongoing investments in transmission capacity and grid modernization position Hydro One to deliver solid cash flow, supporting its future payouts.
TC Energy (TSX:TRP) is a reliable dividend grower, increasing its payout for 26 consecutive years, most recently by 3.2%. With roughly 98% of EBITDA generated from regulated assets or long-term, take-or-pay contracts, its cash flow remains relatively insulated from commodity price volatility. This stability enables it to consistently return capital to shareholders.
The company operates a vast pipeline network linking low-cost North American natural gas supply to key demand centres, ensuring high asset utilization and resilient earnings. TC Energy is also diversifying into nuclear, wind, and solar projects, broadening its exposure to lower-emission energy while preserving a contracted, low-risk earnings base.
Its multi-billion-dollar capital program focuses on long-duration, highly executable projects designed to deliver attractive returns. At the same time, structural tailwinds, including electrification, data centre expansion, and coal-to-gas conversions, are expected to drive sustained energy demand and its financials. TC Energy projects long-term annual dividend growth of 3% to 5%, making it a compelling stock for a growing income stream.
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Fool contributor Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
