Investing is about meeting financial needs. While all financial needs boil down to money, the frequency, amount, tax treatment, and volatility of this money are what determine the financial need. Some investors want a significant amount in one go in the long term, maybe to buy a flat or pay for higher education. Some investors want a sizeable monthly income after 10-15 years without worrying about taxes while having a lump sum amount in the savings account for emergencies. However, the two goals need separate portfolios, with the first goal focused on growth stocks and the second on dividend stocks.

Two magnificent dividend stocks

To earn a sizeable income later, you have to invest today. Some qualities of magnificent dividend stocks are they pay regular dividends and grow them at a high rate. Your income grows with the dividend, giving you a sizeable passive income in the long term.

Cogeco Communications

Cogeco Communications (TSX:CCA) is an upcoming dividend stock that has consistently grown its dividend for 11 years at an average annual rate of 11%. However, its dividend growth rate has slowed to 8% as the telco is investing heavily in fibre infrastructure. Cogeco faces competition from telecom giants that have a vast fibre infrastructure and multiple services such as digital advertising, TV, and radio, which they bundle together.

Despite the competition, Cogeco has managed to grow its subscriber base and revenue steadily. However, 2024 was a challenging year for all telcos.

Cogeco's revenue fell 0.3% and net profit fell by 15.3% because of an impairment of property. The company is restructuring its business to improve efficiency and compete with peers. Its free cash flow increased by 13.9%, and it allocated 30% towards dividends. The company has $4.48 billion in long-term debt and $76.3 million in cash reserves. However, high leverage is common in the telecom business as the fibre infrastructure pays off.

Cogeco Communications has scope to grow its market share. Being a small player, it has to offer lucrative dividends to shareholders. As the company grows, its dividends could also grow.

The stock corrected 10% since December 2024 and is trading above $66.

Canadian Natural Resources

Canadian Natural Resources (TSX:CNQ) has a 25-year history of growing dividends at a 21% compounded annual growth rate (CAGR). It has Canada's largest oilsands reserves and second-largest natural gas reserves. Most of its projects are low-maintenance and have a lower declining rate, which reduces its capital expenditure (capex) requirement.

In 2024, CNQ increased its net capex to $14.4 billion from $4.9 billion a year ago to acquire properties. This doubled its debt to $18.8 billion. However, this is a one-time investment as the company will now develop these properties for several years and increase its oil and gas production. For 2025, it has a capex of $6.15 billion.

Its earnings depend on its product mix and oil and gas prices. The company gave a special dividend in 2022 as oil prices soared and it made windfall gains. For 2025, it expects high-value synthetic crude oil, light crude oil, and natural gas liquids to make up 65% of its production. It can continue to grow dividends by increasing production.

CNQ stock has corrected 20% from its April 2024 peak and is trading around $43.

10 years from now, these magnificent dividend stocks could give this passive income

If you invest $10,000 in the two stocks now, you can buy 150 shares of Cogeco and 230 shares of Canadian Natural Resources. Assuming a dividend CAGR of 8% and 10%, respectively, these shares can give you $1,093 in annual dividends in 2025 and grow it to $2,380 by 2034.