If your goal is a steady passive income for a lifetime, consider buying top dividend-paying Canadian stocks now. Many of the best Canadian dividend stocks offer decent returns at current levels. In addition, your payouts are safe and sustainable over the long term.
So, if you want to generate a steady and predictable passive income for a lifetime, consider buying it Bank of Montreal (TSX: BMO) (NYSE: BMO), Fortis (TSX: FTS) (NYSE: FTS) and Enbridge (TSX: ENB) (NYSE: ENB) shares. Additionally, I would suggest investors invest in these top Canadian dividend stocks through their tax-free savings accounts for passive income that cannot be taxed.
Bank of Montreal has paid dividends for 192 years
The Canadian banking giant is one of the most reliable bets for generating constant passive income. It has the longest running dividend payment record (it has paid dividends for 192 consecutive years). Meanwhile, the dividend has risen by a CAGR of 6% over the past 15 years.
The bank’s diversified business, ability to grow in volume, and operational leverage help it achieve solid earnings growth and add long-term value to its shareholders. I believe that the continued momentum across all of its businesses, solid credit performance and expense management are well placed to place the company in a good position to generate healthy earnings growth. The Bank of Montreal expects its future earnings to grow 7-10% annually over the coming years, which provides a solid foundation for future dividend growth.
The Bank of Montreal offers a dividend yield of 3.3% and trades at a P / E ratio of 1.6, which is well achievable and lower than most of its peers.
Fortis has increased its dividend for 47 straight years
Fortis is a different one reliable Canadian stock generate a lifelong passive income. The company has consistently achieved above-average overall shareholder returns over the past few years. Its low-risk and diversified utility assets deliver resilient cash flows that drive its dividend.
In particular, the company has consistently increased its dividend for 47 years and has continued to increase it at a decent pace thanks to its predictable cash flows and growing asset base. I believe that the growth in the interest base, the increase in retail electricity sales, and the focus on lowering operating costs could further boost earnings, and therefore the dividend as well. In addition, an increase in renewable power generation capacity and strategic acquisitions could increase Fortis’ growth rate.
The company expects a 6% annual dividend hike over the next five years, reflecting a $ 10 billion growth in its interest base. Fortis pays a quarterly dividend of $ 0.505 per share, which translates to a yield of 3.6%.
Enbridge’s dividend grows at a CAGR of 10%
The energy infrastructure giant is one of the best Canadian company Generating passive income for a lifetime, and there are good reasons for that. Enbridge’s diverse sources of cash flow and contractual framework help the company deliver robust and resilient cash flows that fuel its higher dividend payments.
In particular, Enbridge has increased its dividend since 1995 with a CAGR of 10%, which is the highest among its peers. Additionally, it has been paying dividends for more than 66 years and remains on track to steadily grow its shareholder returns for years to come. The positive long-term energy outlook, the gradual transition from Enbridge to a low-risk utility-like business, the momentum in its core business, the multi-billion dollar secured capital growth program and productivity and cost-saving initiatives bode well for future growth.
With a forward EV / EBITDA multiple of 12.2 and a dividend yield of 6.9%, Enbridge is an attractive long-term bet.
This article represents the opinion of the author who may disagree with the “official” endorsement position of a premium service or advisor to the Motley Fool. We are Motley! Questioning an investment thesis – even one of our own – helps us all think critically about investing and make decisions that will help us get smarter, happier, and richer. As a result, we sometimes publish articles that may not match recommendations, rankings, or other content.
The fool Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Enbridge. The Motley Fool recommends FORTIS INC.
