The Best Sustainable Stocks for Passive Income in 2026

Investors seeking reliable passive income in 2026 could consider Canadian dividend stocks with sustainable payouts. Notably, companies with strong fundamentals, stable cash flows, and disciplined capital allocation are better positioned to maintain dividend payments even during periods of economic uncertainty. Their financial strength and operational resilience help ensure steady distributions over time, making them appealing options for passive-income investors.

Against this backdrop, here are the best sustainable stocks for passive income in 2026.

Best passive income stock #1: Fortis

Fortis (TSX:FTS) is one of the top Canadian dividend stocks to generate steady passive income in 2026. The utility company is focused primarily on the transmission and distribution of electricity. Its defensive business model is anchored by a large regulated asset base, which enables the company to generate predictable cash flows. This stability supports consistent dividend payments and growth.

The company’s dividend payment record is appealing. Fortis has increased its dividend for more than 50 years, demonstrating its commitment to returning capital to shareholders. In November 2025, the utility company raised its dividend by 4.1%, marking its 52nd consecutive year of dividend growth.

Over the next five years, Fortis expects to invest about $28.8 billion, with most of that capital going toward regulated utility infrastructure. Rather than pursuing large or risky development projects, Fortis focuses on steadily expanding its regulated asset base. This disciplined approach allows the company to grow earnings and avoid major execution challenges.

These investments are expected to increase Fortis’s consolidated rate base to $58 billion by 2030. As this regulated asset base expands, the company anticipates steady earnings growth. That growth should support continued dividend increases at an annual rate of about 4% to 6%.

The long-term outlook for Fortis remains solid, supported by rising electricity demand. Industries such as manufacturing and data centres are expected to drive higher power consumption in the coming years. At the same time, the company’s decision to sell non-core assets has strengthened its balance sheet. Overall, these factors position Fortis as a stable and reliable investment option for investors seeking passive income.

Best passive income stock #2: Enbridge

Enbridge (TSX:ENB) is a durable income stock that offers investors a compelling combination of sustainability and a high yield of 5.2%. Its commitment to income investors is reflected in a dividend payment history of over 70 years. Since 1995, the energy infrastructure company has increased its dividend at an average annual rate of roughly 9%, showing its ability to maintain growth across commodity cycles and varying economic conditions.

The consistency of Enbridge’s dividend is supported by a low-risk, diversified operating model. Cash flow is generated through a broad network of energy infrastructure assets, helping reduce earnings volatility and support distributable cash flow (DCF). A significant portion of the company’s EBITDA comes from regulated businesses or long-term take-or-pay contracts, which limit direct exposure to commodity price swings and provide predictable revenue. Additionally, many of these agreements include inflation adjustments, helping offset rising costs while supporting long-term cash-flow expansion.

Enbridge’s extensive infrastructure network further strengthens its financial stability. Its pipelines and related assets link major supply basins with key demand centres across North America, supporting strong utilization and positioning the company to benefit from ongoing energy demand.

Enbridge is well-positioned to extend its dividend growth record. Stable, contract-based revenue streams and high asset utilization support steady growth in DCF per share. Over the past five years, Enbridge has returned approximately $38 billion to shareholders through dividends and expects to distribute $40 billion to $45 billion over the next five years. With a targeted DCF payout ratio of 60% to 70%, Enbridge maintains the flexibility to fund growth while continuing to reward investors.

The post The Best Sustainable Stocks for Passive Income in 2026 appeared first on The Motley Fool Canada.

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More reading

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• The Dividend Stocks I’d Feel Most Confident Buying and Never Selling

Fool contributor Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge and Fortis. The Motley Fool has a disclosure policy.