4 Canadian Dividend Stocks to Buy and Hold Forever

Are you seeking passive-income stocks that provide consistent dividends over the long term? While no company is entirely immune to financial challenges that might necessitate dividend cuts, certain firms are robust enough to be held for extended periods. For instance, Warren Buffett's investment in Coca-Cola in the late 80s has yielded a 60% return on his original purchase price to date. In this article, we explore four TSX dividend stocks that are worth considering for prolonged investment to secure passive income for life.


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Canadian National Railway (TSX:CNR)

Canadian National Railway (CNR) is a standout Canadian dividend stock with a current yield of 2%. Although it doesn't offer the highest yield, its impressive historical dividend growth, averaging around 12% annually over the past five years, makes it a compelling choice. If this growth trajectory continues, today's investors could enjoy a significantly higher yield on cost in the future.


CNR's substantial dividend growth is supported by its strong earnings performance. Over the last decade, the company has achieved an average annual revenue growth of 4.2% and an earnings growth of 10.5%. These solid fundamentals underpin the consistent dividend hikes. Additionally, CNR benefits from a dominant competitive position with only one major competitor in Canada, operating in an essential industry. This unique setup positions CNR as a reliable dividend stock for long-term investors.

Canadian Pacific Kansas City Railroad (TSX:CP)

Canadian Pacific Kansas City Railroad (CP) is another formidable player in the railroad sector. Despite its modest 0.72% dividend yield, CP's potential for dividend growth is significant. Over the past five years, CP has achieved an annual dividend growth rate of 7.7%, which, while slower than CNR's, is still noteworthy.


CP's acquisition of the U.S. railroad Kansas City Southern has positioned it uniquely as the only railway linking Canada, the U.S., and Mexico. This strategic expansion opens up numerous growth opportunities. While CP shares many similarities with CNR, its distinctive North American rail network provides additional avenues for long-term growth and dividend increases.

Fortis (TSX:FTS)

Fortis is a prominent Canadian utility company and a Dividend King with a remarkable 50-year streak of increasing dividends. As a regulated utility, Fortis enjoys stable revenue streams and a strong competitive position in its service areas. Utilities typically benefit from high consumer dependence, with customers prioritizing essential services like heating and electricity over discretionary spending.


Fortis has consistently outperformed its peers in the TSX utility sector. One key factor is its disciplined approach to dividend payments, ensuring that dividends do not exceed profits. This prudent management has enabled Fortis to maintain financial stability while pursuing growth. The company's strategic acquisitions across North and South America have further bolstered its growth prospects, making Fortis a reliable choice for long-term dividend investors.

Royal Bank of Canada (TSX:RY)

Royal Bank of Canada (RY), the country's largest bank, offers a dividend yield of approximately 4.4%. This substantial yield, combined with a history of consistent dividend growth, makes RY an attractive option for income-focused investors. Over the past five years, RY has increased its dividend at an annual rate of 6.85%, supported by a conservative payout ratio.


Royal Bank's robust financial position is underscored by its disciplined dividend policy and strategic acquisitions. Although some concerns were raised about the high price paid for HSBC Canada, RY's overall strategy and financial management remain sound. The bank's ability to maintain and grow its dividend over time ensures that investors can rely on a steady stream of income.

Wheaton Precious Metals Corp. (TSX:WPM)

Wheaton Precious Metals Corp. (WPM) is a unique addition to our list, offering exposure to the precious metals sector through streaming agreements. WPM provides upfront payments to mining companies for the right to purchase a portion of their future production at a predetermined price, typically below the market rate. This business model allows WPM to benefit from rising metal prices while minimizing operational risks.


WPM's diversified portfolio of streaming agreements spans gold, silver, and other precious metals, providing a balanced exposure to the sector. The company's consistent dividend payments, supported by strong cash flows from its streaming contracts, make it an attractive option for long-term dividend investors. With a dividend yield of around 1.3%, WPM offers a unique combination of growth potential and income stability.


Investing in dividend stocks like Canadian National Railway (CNR), Canadian Pacific Kansas City Railroad (CP), Fortis (FTS), Royal Bank of Canada (RY), and Wheaton Precious Metals Corp. (WPM) can provide a reliable stream of passive income for life. Each of these companies boasts a strong competitive position, consistent dividend growth, and strategic initiatives that enhance their long-term prospects. By adding these stocks to your portfolio, you can enjoy the benefits of steady income and potential capital appreciation over the long term.
Location: Canada

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