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Retirees and other investors looking for stable and growing passive income are looking for the best TSX dividend stocks to buy now at dumped prices.
Fortis (TSX:FTS)(NYSE:FTS) is a Canadian utility company with $58 billion in assets across Canada, the United States and the Caribbean.
The growth comes from a combination of strategic acquisitions and development projects. The last major deal was in 2016 when Fortis bought ITC Holdings, a US power transmission company, for US$11.3 billion.
With stock values falling in recent months, it wouldn’t be surprising to see Fortis announce another takeover. The company hired an acquisition specialist as part of the management team last year.
On the development side, Fortis is working on $20 billion capital projects that will increase the rate base by around $10 billion over the next few years. The resulting increase in revenue and cash flow should support projected average dividend increases of 6% per year through 2025.
Fortis has increased distribution in each of the past 48 years, so predictions of future increases should be reliable. This is the kind of stability investors are looking for when choosing the highest dividend paying stocks to generate passive income.
Fortis is trading near $61 per share at the time of writing, compared to a 2022 high of around $65. Investors buying at the current price can earn a dividend yield of 3.5%.
ECB (TSX:BCE)(NYSE:BCE) is Canada’s largest communications company with a current market capitalization of $58 billion. Income-oriented investors have relied on BCE’s generous and growing dividend for decades, and the stock remains a solid choice for a balanced portfolio.
BCE provides essential Internet and mobile services to households and businesses. These income streams tend to hold up well during an economic downturn, making BCE a decent defensive stock to hold during a recession.
The communications industry continues to evolve and BCE is making the necessary investments to ensure it protects its competitive position while preparing the business for revenue and earnings growth in the years to come. BCE plans to run fiber optic lines directly to another 900,000 customer buildings in 2022. The company is also expanding the 5G mobile network after spending $2 billion last year on 3,500 MHz spectrum during the 2021 auction.
BCE is targeting modest revenue and earnings growth in 2022 and free cash flow is expected to jump 2-10% from 2021. This should support another dividend increase for 2023. BCE typically increases the payout by around 5 %.
The decline in BCE’s share price over the past few weeks presents investors with a good opportunity to buy at a discount and earn an attractive dividend yield of 5.8%.
The bottom line
Fortis and BCE are the top dividend-paying stocks with payouts expected to continue growing over the next few years. Businesses provide essential services and tend to be strong defensive choices during economic downturns. If you have the money to invest in a passive income-focused portfolio, these stocks deserve to be on your radar.