Imagine it’s 2035, and you’re looking back at your investments. Which TSX stocks will you wish you had bought and held onto for the long run? While no one can predict the future with certainty, some Canadian dividend stocks have a history of delivering strong returns and growing payouts year after year.
If you’re building a long-term portfolio, you’ll want to own dividend stocks that not only protect your portfolio from short-term market volatility but also provide rising passive income. If you’re looking for such stocks, you’re in the right place. In this article, I’ll highlight two magnificent TSX dividend stocks that could deliver strong returns and passive income for years to come.
TC Energy stock
When you’re looking for top dividend stocks that can generate consistent income, it’s important to focus on companies with strong fundamentals and a clear path for future growth. That’s exactly what makes TC Energy (TSX:TRP) a stock worth considering today.
This Calgary-based leading energy firm mainly transports and stores natural gas while also generating power. With its extensive gas pipeline network, it has a strong presence in Canada, the U.S., and Mexico. After gaining nearly 30% over the past year, TRP stock currently trades at $63.37 per share with a market cap of $65.8 billion. For income-focused investors, its 5.37% annualized dividend yield, which has been increased for 25 straight years, makes it even more attractive.
TC Energy’s continued focus on expansion is another big reason to be optimistic about its future growth prospects. Its Southeast Gateway pipeline, which is now mechanically completed under budget, is set to go live in May 2025. This project is likely to strengthen its position further in Mexico and contribute to its financial growth in the coming years. Meanwhile, its Coastal GasLink pipeline is now fully operational, improving its LNG export capabilities from Canada.
Overall, its long-term contracts and strong demand for natural gas make TC Energy a smart pick for investors seeking reliable dividends and strong long-term returns.
Bank of Montreal stock
Speaking of reliable dividend stocks, Bank of Montreal (TSX:BMO) is another one that long-term investors will likely be glad they bought. BMO is one of Canada’s biggest banks, with a large customer base across North America with personal and commercial banking, wealth management, and capital markets services. Currently, its stock trades at $149.09 per share with a market cap of $108.7 billion after surging by 16.3% over the last year. Investors looking for passive income will appreciate its 4.3% annualized dividend yield, which is paid out quarterly.
In the quarter ended January, BMO posted a 21% YoY jump in adjusted net income to $2.29 billion, while its adjusted earnings climbed to $3.04 per share.
Moreover, BMO is focusing on digital banking expansion, credit card growth, and cross-border banking opportunities. These positive factors, along with its strong balance sheet, steady dividend growth, and a solid market presence, could help BMO stock deliver strong returns over the next decade.