Canadian Companies Boost Payouts, Enticing Income Investors
Income investors are increasingly looking for reliable stocks to include in their Tax-Free Savings Accounts (TFSAs) and Registered Retirement Savings Plans (RRSPs). With the Toronto Stock Exchange (TSX) approaching record highs and economic uncertainty looming, it’s essential to focus on companies with a strong history of dividend growth.
Canadian Companies Boost Payouts: Enbridge and Fortis
Enbridge: A Leader in Energy Infrastructure
Enbridge (TSX:ENB) has been a standout performer, with its share price climbing from $46 to over $70 in the past two years. Investors can still secure a 5.5% dividend yield, positioning Enbridge as an attractive option for income seekers.
As a major player in North American energy infrastructure, Enbridge transports approximately 30% of the oil produced in the U.S. and Canada, and about 20% of the natural gas consumed by American homes and businesses. The company made headlines with its US$14 billion acquisition of three American natural gas utilities in 2024, enhancing its status as the largest natural gas utility operator in North America.
Enbridge’s growing portfolio includes natural gas transmission and storage assets, which are anticipated to meet rising demand for natural gas as new power-generation facilities emerge. In addition, the firm has expanded into energy exports and bolstered its renewable energy division, diversifying its revenue streams for future growth.
The company is also pursuing an extensive $35 billion capital program aimed at boosting distributable cash flow, supporting sustained dividend increases. With a remarkable record of increasing dividends for 31 consecutive years, Enbridge remains a strong candidate for income-focused investors. Additionally, proposed pipeline projects may offer further opportunities for the company to enhance its operations.
Fortis: Consistent Performance and Growth
Fortis (TSX:FTS) demonstrates unparalleled reliability, boasting a remarkable track record of 52 consecutive years of dividend increases. Specializing in power generation and electric transmission, Fortis predominantly generates revenue from rate-regulated assets, ensuring predictable cash flow and stable growth investment planning.
With a $28.8 billion capital program planned through 2030, Fortis aims to enhance its cash flow and raise dividends by 4% to 6% annually. The company is also exploring additional projects that could strengthen its development program. As a frontrunner in Canadian power utilities, Fortis may play a pivotal role in national power grid initiatives.
Investors purchasing Fortis shares at current levels can benefit from a dividend yield of 3.5%, making it a noteworthy addition to any portfolio aimed at generating stable income.
The Bottom Line
Both Enbridge and Fortis offer attractive dividends that are likely to grow over time. For those seeking to build a TFSA focused on passive income, these Canadian companies should certainly be considered for investment.
