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!

2 Top Dividend Picks to Boost Your Investment Income

In the good, old days, investors could get decent returns from GICs or even savings accounts. Unfortunately, things have changed.

Interest rates have fallen so low that dividend stocks are pretty much the only game in town for investors who want to supplement their pensions or paychecks.

On the surface, this might not seem ideal because stocks come with more risk, but there is a big difference between high-risk dividend payers and ones that tend to be much more stable.

With this thought in mind, here are the reasons why I think Toronto-Dominion Bank (TSX:TD)(NYSE:TD) and Fortis Inc. (TSX:FTS) deserve to be on your radar.

TD

TD earned a cool $2.2 billion in fiscal Q1 2016. Yes, you read it right, that’s more than two BILLION dollars in profits for three months of operations.

The most impressive part is the fact that TD and its peers are supposed to be struggling with challenging economic conditions.

Why is TD so successful?

The bank is widely known for having the best retail operation in Canada and is regularly cited for its high level of customer service. TD’s branch employees are also very well trained in the art of selling new products and services, and that makes a big difference to the bottom line.

Some customers might not appreciate the constant barrage of offerings for new credit cards, home equity loans, or higher credit limits, but investors are all smiles.

There is some concern in the market that the ongoing oil rout will eventually hammer the banks. In the case of TD, there is little to worry about because the company’s exposure to the oil and gas sector represents less than 1% of the total loan book.

TD recently hiked its quarterly dividend by 8% to $0.55 per share. That’s good for a yield of 3.95%.

If you want a solid bank pick with low risk, TD is about as good as it gets.

Fortis

Fortis operates natural gas distribution and electricity generation assets in Canada, the United States, and the Caribbean.

Much of the company’s recent growth has been in the U.S., including the US$4.5 billion acquisition of UNS Energy two years ago and the recent announcement of the US$11.3 billion deal to acquire ITC Holdings Corp.

Big purchases can be difficult to integrate, but Fortis has a track record of success in this area, and investors should see the trend continue.

The stock is great for income investors because nearly all of the company’s revenue comes from regulated assets. This means cash flow should be both predictable and reliable, which bodes well for sustainable distributions.

In fact, Fortis is one of Canada’s dividend-growth champions. The company has increased the payout every year for more than four decades, and management plans to boost the distribution by 6% per year through 2020.

The current quarterly payout of $0.375 per share yields 3.7%.

Just released! One top stock for 2016 and beyond

Exports of liquefied natural gas could be one of the best growth opportunities out there for long-term investors. And, we think we've identified the Canadian company to invest in. It's a global company with operations across nearly 20 countries and 70 locations. We like it so much, we've named it as 1 Top Stock for 2016 and Beyond. To find out why, click here now to learn how to access your FREE copy today!

Fool contributor Andrew Walker has no position in any stocks mentioned.

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.