Financial Insights That Matter
Written by Sneha Nahata at The Motley Fool Canada
Canadian dividend stocks of blue-chip companies are top investments for investors looking for steady passive income, stability, and capital gains over time. These are large-cap Canadian companies with fundamentally strong businesses and growing earnings bases that support their growth and regular distributions. With this background, here are the three blue-chip dividend stocks that every Canadian should own for worry-free income.
When it comes to Canadian blue-chip dividend stocks, Fortis(TSX:FTS) stands out as a top choice. Backed by a diversified portfolio of regulated utility businesses, Fortis generates stable and predictable cash flows supporting its payouts.
Thanks to its defensive business model and growing earnings base, Fortis is one of Canada’s most reliable dividend growth stocks. It has increased its payouts for 51 consecutive years, placing the company among an elite group of dividend kings.
Looking ahead, Fortis is well-positioned to continue this trend. Management plans to grow dividends by 4–6% annually through 2029, supported by the company’s expanding earnings base and capital investments.
Fortis is investing heavily in infrastructure to ensure sustainable growth. Its $26 billion capital expenditure program is expected to grow its rate base at a CAGR of 6.5% through 2029. This increase in the rate base is a key driver for future earnings growth, which in turn supports consistent dividend hikes.
Moreover, Fortis’s solid transmission investment pipeline and energy transition opportunities bode well for future growth.
While Fortis is a worry-free income stock, it also offers a decent yield of 3.9%.
Leading Canadian bank stocks like Bank of Montreal (TSX:BMO) are a must-have for steady passive income. This blue-chip dividend stock is known for its impressive dividend payment history. Notably, the financial services company has regularly paid dividends for 195 years, the longest dividend payment streak by any publicly traded Canadian company.
Further, it has increased its dividend by about 5% annually in the past 15 years. Bank of Montreal’s solid dividend payment and growth history make it a reliable income stock and reflect the bank’s ability to grow its earnings consistently.
Bank of Montreal’s diversified revenue streams, growing deposit base, and operational efficiency will cushion its earnings and dividend payments. Further, its robust balance sheet and stable credit performance augur well for growth.
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