One of the most effective ways to build 20 years of passive income is by focusing on high-quality dividend-paying stocks. These are stocks with solid fundamentals that have consistently paid and increased their dividends, and are committed to rewarding shareholders in all market conditions.
Notably, many of the top dividend payers are large-cap firms with resilient business models. Their steady revenues, consistent earnings, and strong free cash flow provide a solid foundation to sustain and grow dividends over time.
Against this background, here are two Canadian dividend stocks that can help you build a reliable portfolio to generate 20 years of passive income.
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Fortis
Fortis (TSX: FTS) is one of the most reliable Canadian dividend stocks to build a passive income stream. This electric and gas utility company’s defensive model and regulated cash flows enable it to pay and increase its dividends regardless of economic cycles.
With nine regulated utilities spread across North America, the company generates most of its income from rate-regulated assets, which provide steady and predictable earnings and cash flow. Furthermore, as Fortis primarily focuses on energy transmission and distribution, areas that are largely insulated from the volatility of power generation, it generates steady cash flows to support its dividend payments.
Thanks to its low-risk earnings base and predictable cash flow, this blue-chip company has raised its dividend for 51 consecutive years. This reflects the strength of Fortis’s business model and management’s commitment to return cash to its shareholders. Currently, the stock offers a well-protected dividend yield of about 3.6%, supported by cash generation from its regulated assets.
Fortis’ future payouts look promising. The company’s rate base is projected to grow by 6.5% per year through 2029, which will drive steady earnings growth. This will likely enable Fortis to continue increasing its dividend by 4% to 6% annually. At the same time, rising electricity demand, particularly from energy-intensive industries like manufacturing and data centres, should create additional growth opportunities.
In short, Fortis’s low-risk business model, predictable cash flows, and commitment to dividend growth make it a reliable income stock.
TC Energy
TC Energy (TSX: TRP) is a top Canadian dividend stock to build lasting passive income. This leading natural gas transportation and storage company operates an expansive pipeline network linking low-cost gas supplies to high-demand markets across Canada, the U.S., and Mexico. Moreover, it has a diversified power generation portfolio that encompasses nuclear, natural gas, wind, and solar energy. This balanced mix provides resilience while also giving the company exposure to capitalize on opportunities in the energy transition space.
Notably, about 97% of TC Energy’s earnings are secured through regulated or take-or-pay contracts, shielding it from market volatility and ensuring consistent cash flow. Thanks to this resilience and stability, TC Energy has hiked its payouts for 25 consecutive years and currently distributes $0.85 per share quarterly, yielding over 4.8%.
Looking ahead, TC Energy’s management expects 3–5% annual dividend growth, supported by $6–$7 billion in capital projects through 2026. Furthermore, rising energy demand, LNG expansion, and the global shift toward reliable, lower-emission fuels provide TC Energy with a significant growth opportunity.
For investors seeking reliable long-term dividends, TC Energy is an attractive stock offering a compelling yield of 4.6%.
