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Despite ongoing economic uncertainty and interest rates still well above their lows, many high-quality Canadian stocks continue to grow their businesses and offer dividend hikes to their shareholders in 2024.
This is crucial for several reasons. Firstly, it’s important for investors to find the highest-quality stocks on the market that you can buy and commit to holding for years to come.
The fact that numerous high-quality TSX dividend stocks are primed for dividend hikes this year means they are not only some of the best businesses to buy now as they continue to find ways to operate in this environment, but they are also some of the highest-quality and reliable stocks since many others continue to struggle in this economic landscape.
So, with that in mind, if you’re looking for high-quality stocks that you can buy and hold with confidence, and that can continue to increase the dividends they pay, here are three of the best Canadian stocks to consider adding to your portfolio today.
One of the Best Canadian Stocks to Buy for Consistent Dividend Increases
There’s no question that one of the best dividend stocks Canadian investors can buy for reliability and consistent dividend increases is Fortis (TSX: FTS), the massive utility stock. In fact, Fortis has the second-longest dividend-growth streak in Canada at a whopping 50 straight years.
Fortis is an ideal stock to buy today due to its reliable business model, its ability to continue earning a profit no matter what the economic environment, as well as the passive income it provides and consistent increases to the dividend each year.
In addition, Fortis is also a stock to buy now before interest rates continue to fall. Although Fortis is one of the least volatile stocks on the market, one of the biggest factors impacting its share price and keeping the stock off its 52-week high has been higher interest rates.
So, with the Bank of Canada now in the process of lowering interest rates and the Federal Reserve expected to follow suit by the end of the year, now is the time to scoop up Fortis shares before they inevitably rally.
Today, Fortis offers a yield of roughly 4.3%, and with the stock typically increasing its dividend toward the end of the calendar year, the passive income that Fortis generates and the reliability of its operations make it one of the best Canadian dividend stocks to buy now.
A Top Canadian Telecom Stock
While utility stocks are some of the best Canadian dividend stocks, telecommunications is another industry with high-quality companies consistently generating substantial cash flow. Right now, Telus (TSX: T) looks like one of the best stocks to buy on the TSX.
Although its 19-year dividend-growth streak is nowhere near as long as Fortis’s, it’s certainly still impressive. Furthermore, Telus is a stock that typically increases its dividend twice a year — something you don’t often see.
So, although it’s already increased its dividend in 2024, there’s a strong possibility it could increase the dividend again in the fourth quarter. It’s also worth noting that analysts estimate a 7% annual growth in the dividend for at least the next three years, which is a considerable increase, especially for such a large and established stock.
A High-Potential Growth Stock That’s Consistently Increasing Its Dividend
Lastly, Alimentation Couche-Tard (TSX:ATD) is one of the highest-quality stocks on the market that’s due for a dividend increase this year.
Couche-Tard doesn’t pay much of a dividend at all right now. Despite having a dividend-growth streak of 13 straight years, it only offers a yield today of roughly 0.9%. However, that’s because Couche-Tard is still growing its business rapidly and reinvesting most of its earnings into future growth.
So, although the stock shows no signs of slowing down, the larger it gets, the harder it will be to continue growing at such an impressive pace. When it does, and there is less growth potential available, Couche-Tard will likely begin paying more money back to investors.
