Written by Sneha Nahata at The Motley Fool Canada

Top dividend stocks can help investors earn recurring passive income for decades. Moreover, their strong fundamentals, growing earnings base, and focus on rewarding shareholders enable these companies to increase their distributions consistently over time. So, for investors seeking worry-free income, here are my top three dividend stocks to buy now.

Dividend stock #1

TC Energy (TSX:TRP) is an attractive dividend stock for its solid dividend payment history, higher future payouts, and compelling yield. For instance, this energy infrastructure company’s dividend grew at a CAGR of 7% for 24 consecutive years. Further, TC Energy expects to increase its dividend by 3-5% every year over the long term. Besides higher dividends, it offers a high yield of about 5.9%.

TC Energy’s regulated and contracted assets witness high utilization and generate predictable cash flows that support higher distributions.

Looking ahead, TC Energy’s focus on optimizing its portfolio and spinning off the Liquids business will enable it to generate steady growth and maximize shareholders’ value. Moreover, the company’s long-life infrastructure assets and $31 billion secured projects will generate significant earnings in the coming years and support its higher payouts.

Dividend stock #2

Speaking of top dividend stocks, Fortis (TSX:FTS) is a no-brainer. This Canadian electric utility company operates a defensive business model, with its regulated assets generating predictable and growing cash flows. As a result of its low-risk and expanding earnings base, Fortis has established a reputation for consistently rewarding its shareholders with higher dividend payments and providing a worry-free yield.

This utility giant has raised its dividend for 51 consecutive years. Moreover, Fortis is well-positioned to continue this trend, with plans for further dividend increases supported by its growing rate base.

Fortis’s $26 billion capital program will help expand its rate base at a compound annual growth rate (CAGR) of 6.5% through 2029. This investment will enable Fortis to enhance its earnings and grow its quarterly distributions. Fortis projects its dividend to increase at a CAGR of 4-6% over the same period, reflecting its commitment to enhancing shareholder value.

In summary, Fortis’s solid rate base growth, robust transmission investment pipeline, and opportunities arising from the energy transition position the company well for long-term growth. This will enable Fortis to grow its dividend consistently. Further, it offers a well-protected yield of about 4.2%.