3 Top Stocks With High Dividend Growth to Buy in 2023 and Hold Forever

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Written by Kay Ng at The Motley Fool Canada

The following top TSX stocks have experienced at least five years of high dividend growth. Interested investors can consider buying them on weakness.

Canadian Natural Resources

Canadian Natural Resources (TSX:CNQ) has been an outperformer in the energy sector, as shown in the graph below. A part of its returns are attributable to a solid and growing dividend.

CNQ Total Return Level Chart
CNQ Total Return Level Chart

CNQ and XEG 10-Year Total Return Level data by YCharts

Despite an unpredictable industry with ups and downs in energy prices, CNQ has an amazing track record of dividend growth. It has increased its dividend for about 22 consecutive years with five-, 10-, and 15-year dividend-growth rates of approximately 21-23%. Its three-year dividend-growth rate is even higher at north of 27%.

The oil and gas company is well run and is comprised of a diversified portfolio of assets across natural gas (about 27% of its production mix this year), heavy oil (29%), light oil and natural gas liquids (10%), and synthetic crude oil (34%). It continues to generate substantial cash flows and maintain a solid balance sheet.

The top energy stock just increased its quarterly dividend by about 11%, and on a trailing 12-month basis, its dividend is roughly 19% higher! At $87.79 per share at writing, it offers a dividend yield of almost 4.6%. The 12-month analyst consensus price target represents a discount of roughly 11%.

Jamieson Wellness

Jamieson Wellness (TSX:JWEL) is a young Canadian Dividend Aristocrat compared to Canadian Natural Resources. The manufacturer, distributor, and marketer of branded natural health products, including vitamins, minerals, and supplements had its initial public offering in July 2017. Since 2018, it has delivered resilient and growing earnings. As well, it has increased its dividends over the years. Its most recent dividend hike was 11.8% in August.

The consumer staples stock was too cheap to ignore as it has popped north of 20% from the bottom since it reported its third-quarter results earlier this month. That said, the stock, which is still down about 16% from a year ago, still trades at a good valuation.

At $36.79 per share at writing, it offers a dividend yield of almost 2.8%. According to TMX, the 12-month analyst consensus price target represents a discount of roughly 26%.

Alimentation Couche-Tard

Although categorized as a consumer discretionary stock, Alimentation Couche-Tard’s (TSX:ATD) profits have been resiliently growing through the economic cycle. It is a prime example of a defensive growth stock. In the past 10 fiscal years, it increased its diluted earnings per share by about 23% per year. Accordingly, in the period, it also 10 times its dividend, which comes out to an increase of about 25.9% per year!

The global consolidator of convenience stores, of which many locations have roadside fuel retail, enjoys a competitive advantage to smaller players with its large size and scale. It generates annual revenue of about US$70 billion, which ultimately makes profits of approximately US$3 billion.

It generates substantial free cash flow that supports a growing dividend. At $78.57 per share at writing, the stock is fairly valued. Because of its quality, the stock seldom goes on sale. When it does, interested investors should scoop up shares.

The post 3 Top Stocks With High Dividend Growth to Buy in 2023 and Hold Forever appeared first on The Motley Fool Canada.

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Fool contributor Kay Ng has positions in Alimentation Couche-Tard. The Motley Fool has positions in and recommends Alimentation Couche-Tard. The Motley Fool recommends Canadian Natural Resources and TMX Group. The Motley Fool has a disclosure policy.