MENU

First Brexit… then Trump… Now, it’s time for Pro

Is your portfolio really prepared for what’s coming next?

To help investors like you navigate this historically uncertain — yet high-flying — market and prepare for an inevitable downturn, we’re re-opening our Motley Fool Pro Canada service to a select few new members for a short time.

To discover how Pro Canada could help you to increase your upside potential… reduce your downside risk… and earn paycheque-like income in the process, simply click here — before the small number of spots we have left are all gone!

3 Quality Dividend Stocks for New Investors

There are hundreds of stocks to choose from. New investors may wonder where to begin. Well, dividend stocks are typically more stable than non-dividend stocks. Further, dividend stocks generally provide higher returns in the long term. And dividend-growth stocks tend to perform even better than stocks that pay a dividend but don’t increase it.

Here are three dividend-growth stocks you can start with.

Utility

Fortis Inc. (TSX:FTS) is one of the top utilities and one of the top dividend-growth stocks in Canada. It has paid growing dividends for 41 years in a row.

It recently increased its dividend by 10.3%. It now pays out 37.5 cents per share, per quarter, and yields close to 4% at about $38 per share.

Fortis is primarily a regulated utility. Although that means its upside is capped, it also means that its returns are more predictable, and it’s a low-risk investment.

Telecom

Telus Corporation (TSX:T)(NYSE:TU) is one of the Big Three telecoms in Canada.

It’s uncommon for Telus to have a yield above 4%, but now you can buy its 4.2% yield at about $42 because it just raised its quarterly dividend to 44 cents per share.

In fact, Telus has consistently increased dividends since 2004. For the last five years it has averaged dividend increases of about 10% per year.

Why is it able to do that?

Telus buys back and cancels its common shares. Over the last decade, its share count has reduced by 14.4%. So, if you bought the shares 10 years ago and didn’t buy any more, you would have received growing income, and your stake in the business would have grown.

Bank

Canadian banks are of the most solid, stable banks in the world. Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) is the third-largest bank in Canada.

Although the bank has been lagging behind the other Canadian banks in the last five-year period, Bank of Nova Scotia provides the highest yield of the bunch. It yields close to 4.6% at about $61.50 per share. If a regular income is important to you, then the bank’s higher yield will generate a slightly higher income for you.

With a quarterly dividend of 70 cents per share, Bank of Nova Scotia is paying out 6% more dividends than it was a year ago. As a matter of fact, if you had invested in it 10 years ago, your income from its dividends would have more than doubled, increasing by 106% to be exact.

In conclusion

Fortis, Telus, and Bank of Nova Scotia are quality dividend stocks with solid balance sheets. They have S&P credit ratings of at least BBB+.

They have a history of becoming more profitable over time. That’s why they have a track record of growing dividends, so shareholders’ income continues to grow every year.

Want more top dividend stocks?

These three top stocks have delivered dividends for shareholders for decades (and even centuries!). Check out our special FREE report: "3 Dividend Stocks to Buy and Hold Forever". Click here now to get the full story!

Fool contributor Kay Ng owns shares of FORTIS INC, TELUS (USA), and The Bank of Nova Scotia (USA).

NEW! This Stock Could Be Like Buying Amazon In 1997

For only the 5th time in over 14 years, Motley Fool co-founder David Gardner just issued a Buy Recommendation on this recent Canadian IPO.

Stock Advisor Canada’s Chief Investment Adviser, Iain Butler, also recommended this company back in March – and it’s already up a whopping 57%!

Enter your email address below to claim your copy of this brand new report, “Breakthrough IPO Receives Rare Endorsement.”

I consent to receiving information from The Motley Fool via email, direct mail, and occasional special offer phone calls. I understand I can unsubscribe from these updates at any time. Please read the Privacy Statement and Terms of Service for more information.