Dividend payments offer a great way to generate steady income. However, because distributions are never guaranteed, investors should target dividend-paying companies backed by solid fundamentals, growing earnings, and robust balance sheets that can reliably sustain and raise payouts over time.
Plenty of high-quality TSX-listed companies manage to grow their dividends regardless of market ups and downs. If you want to construct a reliable Canadian income portfolio, these top dividend stocks are great places to start.
With that in mind, here are the three best Canadian dividend stocks to build a strong income portfolio.
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Top Canadian dividend stock #1: Fortis
Fortis (TSX: FTS) stands out as an essential holding for income-focused investors. Thanks to regulated operations that generate predictable cash flows and a recession-resistant business model, the utility company delivers exceptional dividend stability.
With 52 straight years of dividend growth, Fortis continues to show solid financial health. It plans to deploy $28.8 billion in capital investments through 2030, driving its rate base up to $57.9 billion at a 7% annual compound growth rate.
This regulated growth trajectory will support management’s guidance of 4% to 6% yearly dividend hikes through 2030. Looking ahead, its expanding U.S. transmission capabilities to handle rising power demands and renewable energy projects, grid modernization initiatives, and expanding clean gas infrastructure across British Columbia augur well for growth and dividend payments.
Top Canadian dividend stock #2: Enbridge
Like Fortis, Enbridge (TSX: ENB) is one of the top Canadian income stocks. Its over seven decades of continuous distributions, unbroken streak of annual dividend hikes since 1995, and compelling 5.6% yield support the investment case.
ENB’s payout is anchored by low-risk, regulated operations and long-term take-or-pay contracts that generate predictable cash flow regardless of commodity price volatility. Looking ahead, Enbridge’s massive $41 billion secured growth backlog, strong asset utilization, high base rates, and expanding renewable power portfolio point to strong growth.
Enbridge’s management projects ~5% annual growth in adjusted EPS and distributable cash flow per share in the medium term. This indicates that ENB’s dividends could grow at a similar pace. Moreover, its payout ratio is sustainable in the long run.
Top Canadian dividend stock #3: Toronto-Dominion Bank
Toronto-Dominion Bank (TSX: TD) is another reliable stock to build a strong income portfolio. This leading Canadian financial institution has a strong record of returning capital to shareholders. Further, since 2016, the bank’s annual dividend has grown by about 8% annually. Its solid payouts and consistent dividend growth highlight TD’s commitment to returning cash to its shareholders.
The bank’s diversified operations provide multiple sources of earnings growth. In addition, TD’s credit performance also remains resilient. Improving operating leverage is another positive factor. Rising revenue, combined with ongoing efforts to reduce operational costs, should help support profitability and dividend growth.
With a targeted long-term payout ratio of 40–50%, TD can continue increasing dividends while retaining capital to invest in future growth opportunities.
The bottom line
For investors looking to build a dependable Canadian income portfolio, Fortis, Enbridge, and TD Bank offer a compelling combination of yield, stability, and dividend growth. While no dividend is guaranteed, these companies have shown they can generate resilient cash flows and return capital to shareholders through different market cycles. Moreover, they have the financial strength and growth potential to grow today’s income over time.
Dividend payments offer a great way to generate steady income. However, because distributions are never guaranteed, investors should target dividend-paying companies backed by solid fundamentals, growing earnings, and robust balance sheets that can reliably sustain and raise payouts over time.
Plenty of high-quality TSX-listed companies manage to grow their dividends regardless of market ups and downs. If you want to construct a reliable Canadian income portfolio, these top dividend stocks are great places to start.
With that in mind, here are the three best Canadian dividend stocks to build a strong income portfolio.
Source: Getty Images
Top Canadian dividend stock #1: Fortis
Fortis (TSX: FTS) stands out as an essential holding for income-focused investors. Thanks to regulated operations that generate predictable cash flows and a recession-resistant business model, the utility company delivers exceptional dividend stability.
With 52 straight years of dividend growth, Fortis continues to show solid financial health. It plans to deploy $28.8 billion in capital investments through 2030, driving its rate base up to $57.9 billion at a 7% annual compound growth rate.
This regulated growth trajectory will support management’s guidance of 4% to 6% yearly dividend hikes through 2030. Looking ahead, its expanding U.S. transmission capabilities to handle rising power demands and renewable energy projects, grid modernization initiatives, and expanding clean gas infrastructure across British Columbia augur well for growth and dividend payments.
Top Canadian dividend stock #2: Enbridge
Like Fortis, Enbridge (TSX: ENB) is one of the top Canadian income stocks. Its over seven decades of continuous distributions, unbroken streak of annual dividend hikes since 1995, and compelling 5.6% yield support the investment case.
ENB’s payout is anchored by low-risk, regulated operations and long-term take-or-pay contracts that generate predictable cash flow regardless of commodity price volatility. Looking ahead, Enbridge’s massive $41 billion secured growth backlog, strong asset utilization, high base rates, and expanding renewable power portfolio point to strong growth.
Enbridge’s management projects ~5% annual growth in adjusted EPS and distributable cash flow per share in the medium term. This indicates that ENB’s dividends could grow at a similar pace. Moreover, its payout ratio is sustainable in the long run.
Top Canadian dividend stock #3: Toronto-Dominion Bank
Toronto-Dominion Bank (TSX: TD) is another reliable stock to build a strong income portfolio. This leading Canadian financial institution has a strong record of returning capital to shareholders. Further, since 2016, the bank’s annual dividend has grown by about 8% annually. Its solid payouts and consistent dividend growth highlight TD’s commitment to returning cash to its shareholders.
The bank’s diversified operations provide multiple sources of earnings growth. In addition, TD’s credit performance also remains resilient. Improving operating leverage is another positive factor. Rising revenue, combined with ongoing efforts to reduce operational costs, should help support profitability and dividend growth.
With a targeted long-term payout ratio of 40–50%, TD can continue increasing dividends while retaining capital to invest in future growth opportunities.
The bottom line
For investors looking to build a dependable Canadian income portfolio, Fortis, Enbridge, and TD Bank offer a compelling combination of yield, stability, and dividend growth. While no dividend is guaranteed, these companies have shown they can generate resilient cash flows and return capital to shareholders through different market cycles. Moreover, they have the financial strength and growth potential to grow today’s income over time.
