Home » Investing » The 3 Best Canadian Dividend Stocks to Buy for Dividend Growth
These three Canadian dividend stocks look well-positioned to see continued upside over the long term.
Posted by
Chris MacDonald has had a love for finance his whole life, ultimately leading him to pursue an MBA in finance. He's worked as a financial analyst for a number of companies in the corporate finance and venture capital space during his 10-year investing career. He endeavors to follow in the footsteps of iconic investors like Warren Buffett in building a long-term defensive portfolio.
Published
The Toronto Stock Exchange has several high-quality dividend stocks that offer higher yields comparable to those of bonds, but with higher growth profiles over the long term. These are the sort of dividend proxies I think are worth considering right now. That’s doubly true now that we’re entering a period of declining interest rates.
For those looking for a short list of dividend stocks to consider, here are three Canadian companies that may be worth some additional research and attention right now.
Fortis
Fortis (TSX:FTS)operates and owns 10 utility transmission and distribution assets in Canada and the United States. The company also offers capital programs and growth plans to meet energy requirements. Fortis continues to collaborate with the government, industry associations, and other stakeholders to establish environmental standards appropriate for the business and utilities.
Over the past five decades, Fortis has provided consecutive increases in its dividend payout, with more than 20 years of compelling and stable returns. Currently, Fortis serves more than 3 million customers with US$68 billion in assets. Notably, the company also aims to expand and diversify its portfolio while delivering reliable, safe, and cost-effective energy service to its customers.
Moreover, the company’s five-year capital plan is expected to increase the midyear rate base to US$49.4 billion by 2028 from US$37 billion in 2023, accounting for a five-year CAGR of 6.3%. Hence, Fortis appears well-positioned to allow income investors to grow their capital over this period.
Alimentation Couche-Tard
Alimentation Couche-Tard (TSX:ATD)is a retail company operating a convenience store network in Europe and North America. The company primarily offers food, non-food items, and transportation fuels. In addition, Couche-Tard also offers car wash services in the region.
Recently, Alimentation Couche-Tard Inc. announced its financial reports for the fourth quarter of fiscal year 2024, highlighting net earnings attributable to shareholders of US$453 million. In addition, the report also showcases the company’s reported net earnings of US$2.8 billion and comprehensive income of $2.6 billion.
As a business, Alimentation Couche-Tard Inc. commits to sustainability and extends it to the financing of its global operations. In addition, the company’s financial strength is expected to hold up its ability to enhance and increase its market presence across the regions. Hence, the company aims for a CAGR of 16% over the next several years, enabling investors to grow their capital with time.
Suncor Energy
Suncor Energy (TSX:SU)is a production and exploration company in Canada focusing on developing the Athabasca oil sands. The company carries out the development and upgradation of oil sands, onshore and offshore oil and gas production, and marketing of petrochemical products.
Suncor Energy reported its financial reports for the first quarter of 2024, highlighting US$1.6 billion in net earnings. Moreover, the adjusted operating earnings for the period were US$1.8 billion. The company’s adjusted funds from operation for the period came in at US$3.2 billion, or US$2.5 per common share.
As a company, Suncor’s value proposition includes long-life and competitively advantaged assets. It also focuses on operational reliability with disciplined investment and cost management. In addition, the stock’s conservative payout ratio makes the company’s current dividend yield appear to be sustainable. I think now is the right time to invest in this company without hesitation.
