Passive Income: 1 Unstoppable Canadian Dividend Stock to Own Forever
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So far, 2022 has proven to be a disappointing year for equity investors, as the shares of most growth companies have experienced a massive crash. These big losses on high-flying growth stocks are the main reasons why TSX Composite Index has plunged 9% since the start of the year. Despite big losses in growth stocks – especially in the tech sector – many fundamentally strong dividend stocks continue to trade on a strong bullish note, offering exceptional returns to investors outside of the passive income they receive dividends.
This is one of the main reasons why long-term investors are highly recommended to hold quality dividend stocks in their portfolio to stabilize it.
In this article, I’ll talk about one of the best Canadian stocks with unstoppable dividends that you can buy now to hold forever.
The Best Canadian Dividend Stocks to Own Forever
The basic process of choosing dividend-paying stocks to generate passive income is not as difficult as one might think. You just need to make sure you’re investing in companies with strong financials, robust earnings growth, and a proven track record of consistently increasing dividends. Considering these three factors, Canadian natural resources (TSX:CNQ) could arguably be the best dividend-paying Canadian large-cap space stock you can buy right now.
This energy giant has a decades-long history of profitable growth through its diverse asset base and efficient operations. Canadian Natural has a market capitalization of $89.1 billion at the time of writing, as its shares trade at $79.71 per share with strong year-to-date gains of 52%, outperforming the main benchmark of the Canadian market by a huge margin. Now, let me quickly highlight some key fundamentals that make it the best Canadian dividend-paying stock to own forever for reliable passive income.
A reliable source of passive income
Canadian Natural Resources is well known for its opportunistic acquisitions and flexible capital allocation to maximize production. These are some of the reasons why its total revenue in five years between 2016 and 2021 jumped 186%. Notably, its adjusted earnings grew 34% in three years between 2018 and 2021. To add to the optimism, a stronger commodity price environment and more efficient operations have boosted its profitability in recent quarters.
Additionally, a glimpse of Canadian Natural’s strong balance sheet and resilient cash flow is clearly visible if you examine its track record of dividend growth. During the COVID phase, as the entire energy sector struggled due to a sudden drop in prices and demand for energy products, CNQ increased its annual dividend per share by 13% in 2020, followed another 18% increase in 2021.
So far in 2022, the company has announced a dividend of $3.10 per share, even after excluding its special dividend of $1.50 per share, reflecting exceptional growth of 55% over to the previous year. With that, its dividend has increased by 182% in the five years between 2017 and 2022.
At the end of the line
Along with its strong financial and dividend growth record, Canadian Natural’s continued focus on driving profitable growth is enhancing its fundamental outlook. That’s why if you’re looking for the best Canadian dividend stocks to generate passive income, you can definitely consider buying CNQ to hold indefinitely.