Investors in Canada are diligently scouting reliable dividend stocks listed on TSX to be included in their self-administered Registered Retirement Savings Plan (RRSP) collection. As RRSP investments are predominantly long-term, selecting stocks with a robust history of dividend growth for maximising returns seems a practical approach. A common RRSP investment plan is to leverage dividends for acquiring new shares, thereby harnessing the potential of compounding.
Canadian National Railway (TSX:CNR) is a suitable candidate with a consistent rise in its dividends over the past quarter-century. Currently, the market sentiment towards the stock is a bit icy, indicating about a 16% decrease in the past year. This could be a great opportunity for investors to purchase CNR during this substantial drawback.
At the time of this writing, CNR’s trading value hovers around $145, a significant drop from its peak of $180 in 2024. Investors appear to be shying away due to concerns of a potential economic downturn. Every year, CNR successfully transports up to 300 million tons of cargo across approximately 20,000 miles of railway track.
Its vast network extends from the Pacific and Atlantic coasts of Canada to the Gulf Coast of the United States and facilitates the movement of myriad goods such as cars, coal, crude oil, grains, fertilizers, forestry products and finished goods. In other words, the company plays a vital role in smooth operations of both the Canadian and the US economies.
Though a severe recession triggered by US trade tariffs could negatively impact CN’s service demand, the management remains optimistic about prospects in 2025. They anticipate an impressive growth of 10% to 15% in adjusted earnings per share. While there may be some short-term turbulence, history has shown that acquiring CNR stocks during considerable downturns tends to reward buy-and-hold investors.
Equally attractive for dividend-focused investors is Fortis (TSX:FTS), which lifted its dividend each year for the past 51 years. By expertly amalgamating strategic acquisitions with internal projects, the company has managed to consistently grow over the years. The company anticipates its current capital program of $26 billion to boost the rate base from $39 billion in 2024 to $53 billion by 2029.
This significant increase should be substantial enough to back up projected annual dividend growth of 4% to 6% over the next five years. Fortis is pondering over other projects that could become part of its portfolio, thereby extending the course for dividend growth.
Fortis maintains operations in power generation, electrical transmission networks, and gas distribution utilities. Much of these assets are rate-regulated, subsequently implying that the cash flow is typically steady and predictable, irrespective of the economic milieu.
TC Energy (TSX:TRP), with a history of dividend growth over two decades, is another notable mention. Last year, the firm diverted its attention from oil pipelines to focus on the expansion of natural gas transmission, storage operations, and power generation assets after spinning off the former. TC Energy’s operational capacity consists of over 90,000 km of natural gas pipelines and natural gas storage of 650 billion cubic feet.
In the forthcoming years, the demand for natural gas is predicted to spike both domestically and internationally owing to the construction of new gas-fired power generation facilities. These facilities are being built to cater to the electrical requirements of burgeoning artificial intelligence data centres. TC Energy, with its extensive pipeline network across Canada and the United States, is well placed to capitalize on this trend.
Over the past year, TRP stock has risen 32%, but the dividend yield remains attractive at 4.9%. The firm’s medium-term capital program is projected to be about $6 billion per year. This expenditure is in anticipation of asset completion and operation commencement, which should lead to revenue and earnings increase, thereby supporting continuous dividend growth.
Investors should seriously consider CNR, FTS, and TRP – they are shining examples of TSX dividend-growth stocks. If you have been contemplating about where to invest your RRSPs, these stocks should definitely be on your consideration list.