Passive Income: 5 Safe Dividend Stocks to Own for the Next Decade

Holding quality dividend stocks is a popular strategy to create an alternative stream of passive income. You can gain access to dividend stocks with a low amount of capital and benefit from long-term capital gains as well. Further, the best companies increase dividend payouts each year, making them attractive to income-seeking investors.

Here are five safe dividend stocks that Canadians can own for the next decade.

Brookfield Asset Management stock

One of the largest alternative asset managers globally, Brookfield Asset Management (TSX:BAM) provides exposure to multiple sectors, including real estate, clean energy, and infrastructure.

With access to large-scale capital, Brookfield Asset Management can easily make sizeable investments in quality assets globally. These investments should result in fee-based recurring income for BAM, enabling it to pay shareholders a dividend. The company pays investors annual dividends of $1.73 per share, translating to a tasty yield of 4.1%.

Moreover, Brookfield Asset Management expects to increase its fee-bearing capital to more than US$1 trillion in the next five years, which will support dividend hikes in the future.

Enbridge stock

A dividend list is incomplete without Enbridge (TSX:ENB), an energy infrastructure company with a tasty yield of 6.7%. The TSX energy stock has increased dividends for 28 consecutive years, showcasing the resiliency of its business model.

Enbridge continues to expand its base of cash-generating assets and is fast gaining traction in the renewable energy sector, which now accounts for 4% of adjusted EBITDA (earnings before interest, tax, depreciation, and amortization).

A majority of Enbridge’s cash flows are regulated and backed by long-term contracts that are indexed to inflation, making the energy giant almost immune to fluctuations in commodity prices.

Toronto-Dominion Bank stock

One of the largest banks in Canada, Toronto-Dominion Bank (TSX:TD), currently offers a dividend yield of 4.8%. Its conservative approach and well-capitalized balance sheet have allowed TD Bank to maintain its payouts across market cycles.

Despite a less-than-ideal lending environment, rising interest rates allowed TD Bank to report adjusted earnings per share of $2.23 in the fiscal first quarter of 2023 (ended in January) compared to earnings of $2.08 per share in the year-ago period.

Priced at 10 times forward earnings, TD Bank remains a solid bet for income and value investors in April 2023.

Canadian Utilities stock

Canadian Utilities (TSX:CU) is engaged in the electricity, natural gas, and retail energy businesses. A utility giant, the TSX stock offers investors a dividend yield of 4.7%. Further, these payouts have increased for more than 50 consecutive years — the longest streak for a Canadian company.

Canadian Utilities ended 2022 with adjusted earnings of $655 million compared to $586 million in 2021. Its earnings and cash flows should move higher, given the company continues to invest in capital expenditures. For instance, in the fourth quarter of 2022, Canadian Utilities invested $452 million in capital expenditures, of which 85% was allocated toward regulated utilities.

Fortis stock

The final TSX dividend stock on my list is another utility giant — Fortis (TSX:FTS) — that offers a yield of 3.8%. Similar to most other utility companies, Fortis generates a steady stream of cash flows and has increased dividends for 49 consecutive years.

Fortis generates, transmits, and distributes electricity to over 540,000 retail customers south of the border. With an aggregate capacity of 3,328 megawatts, Fortis has a portfolio of solar, hydro, and wind energy assets. It also distributes natural gas to more than one million residential and commercial customers in Canada.

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