Dividend stocks are a solid investment for consistent income. But for investors with a 20-year investment horizon, the focus should extend beyond current dividend yields to companies with the financial strength and earnings visibility to sustain and grow their distributions over time.
Investors should focus on Canadian stocks that pay regular dividends and consistently increase their distributions year after year. Notably, these businesses are backed by strong operations, generate reliable earnings and cash flow, and are better equipped to maintain their payouts through different market conditions.
For income investors with a long-term outlook, here are two dividend stocks to hold for the next 20 years.
Dividend stock #1: Enbridge
Enbridge (TSX: ENB) is a no-brainer dividend stock to buy and hold for the next 20 years. Its diversified energy infrastructure portfolio, consistent dividend growth, and resilient cash flow make it a reliable income stock to hold for years.
ENB has maintained dividend payments for more than seven decades and increased its annual dividend consistently since 1995. Its operations span liquids pipelines, natural gas transportation and storage, gas utilities, and renewable energy, providing exposure to multiple segments of the energy value chain. This diversification reduces reliance on any single business segment and supports earnings resilience.
Further, a substantial proportion of its EBITDA is generated through regulated operations and long-term take-or-pay agreements. These contractual and regulatory structures help generate resilient distributable cash flow (DCF) across all market conditions.
Looking ahead, Enbridge will benefit from its $41 billion secured capital project backlog. As these investments enter service, they are expected to expand the company’s asset base, strengthen earnings capacity, and contribute to long-term DCF per-share growth.
Importantly, Enbridge targets a dividend payout ratio of 60%–70% of DCF, which is sustainable in the long term.
Overall, ENB’s diversified operations, contracted revenue streams, growing EPS and DCF per share, and sustainable payouts position it well to keep growing its dividend.
Dividend stock #2: Toronto-Dominion Bank
Investors looking for a reliable dividend stock with the potential to generate consistent income over the next two decades could consider Toronto-Dominion Bank (TSX: TD). The leading financial institution has a strong record of distributions. It has paid and increased dividends for years, supported by its diversified banking operations and commitment to returning capital to shareholders.
The Canadian bank has paid dividends to shareholders for several decades, and its annual dividend has increased at an average annualized rate of 8% over the past 10 years. This consistent growth highlights the strength of its earnings base and commitment to enhancing shareholder returns.
Currently, TD pays a quarterly dividend of $1.12 per share, yielding 2.6% based on its recent price. Although this yield is relatively low compared with several high-yield Canadian dividend stocks, TD’s ability to keep growing dividends, strong earnings base, and sustainable payouts make it an attractive income stock, especially for the long term.
TD’s diversified revenue streams, including personal and commercial banking, wealth management, and other financial services, position it well to deliver steady growth. Moreover, solid asset quality and credit performance support its bottom line. Its focus on operational efficiency also strengthens profitability and supports higher payouts.
Looking ahead, ongoing strength in the Canadian Personal Banking division, continued growth in Wealth Management and Insurance, and operating efficiency will drive its earnings. Moreover, its low dividend payout ratio of 40%–50% is sustainable in the long term.
Overall, TD’s solid dividend growth history, diversified business model, solid credit quality, and focus on operational improvements provide a solid base for continued earnings and distribution growth.