2 Top Dividend Picks for Any Portfolio

Canadian Utilities Limited (TSX:CU) and Canadian Western Bank (TSX:CWB) have attractive dividends and growth prospects that will fit into any portfolio.

| More on:

Dividend-paying investments can be some of the most rewarding and satisfying investments to own, offering investors a near toll-booth-collector-like experience.

This is particularly true when investing over the longer term, when both reinvested dividends and compounding can lead to truly great returns.

That being said, here’s a look at two of the best dividend-paying companies to add to your portfolio.

Canadian Utilities Limited

Alberta-based Canadian Utilities Limited (TSX:CU) is a utility company with over 5,500 employees and assets in excess of $18 billion. The company primarily serves the north and central-east of Alberta, the Yukon, the Northwest Territories, and Australia.

Utility companies are unique investments in that they offer a required service at a typically guaranteed, regulated rate. This translates into guaranteed revenue for the company, and, by extension, a fairly safe investment that can prove to be extremely profitable over the long term.

Canadian Utilities currently holds the crown for 44 consecutive years of dividend increases. The current quarterly dividend pays out $0.32 per share, which gives the stock a respectable 3.53% yield given the current stock price of $36.85. Another factor to keep in mind is that the dividend-growth rate for Canadian Utilities has averaged over 9% in the past five years.

In terms of results, in the most recent quarter Canadian Utilities reported adjusted earnings of $131 million–an increase over the $101 million posted for the same quarter last year.

Canadian Western Bank

While Canadian Western Bank (TSX:CWB) may not register as one of the Big Six banks of Canada, there are more than a few reasons to consider investing in the Edmonton-based bank, one of which is the impressive dividend.

Canadian Western Bank’s dividend currently stands at $0.23 per share, which results in an impressive 3.69% yield given the current stock price of just under $25. Even more impressive is the fact that Canadian Western has raised that dividend for an impressive 24 years straight.

Canadian Western experienced a drop in earnings in the most recent quarter, posting $45.6 million in net income, down by 11% over the same quarter last year. Earnings dropped by 8% for the quarter, coming in at $0.60 per share. Much of this drop can be attributed to the overall slowdown in the economy and the fact that Canadian Western is not as diversified as the Big Six.

There are two important points to make when considering investing in Canadian Western.

First, despite being a bank focused on western Canada, Canadian Western’s exposure to both the oil industry and the overheated real estate market isn’t as significant as many would believe; just 2% of the bank’s total loans under management fall into the oil and gas sector, and the bank’s mortgage exposure to British Columbia represents just 4% of loans under management.

Second, Canadian Western is making efforts to diversify into other areas and regions of the economy. The acquisition of both Maxium Financial as well as the Canadian Franchise Finance business from GE Capital are set to expand the bank’s reach into the eastern parts of the country.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Demetris Afxentiou has no position in any stocks mentioned.

More on Dividend Stocks

Two seniors float in a pool.
Dividend Stocks

TFSA: How to Earn $1,890 in Annual Tax-Free Income

Plunk these investments into your TFSA to earn passive income and avoid the taxman.

Read more »

Engineers walk through a facility.
Dividend Stocks

1 TSX Stock I Wouldn’t Touch With a 10-Foot Pole

AtkinsRéalis (TSX:ATRL) is one TSX stock I'd never invest in.

Read more »

edit Woman in skates works on laptop
Dividend Stocks

3 No-Brainer Stocks to Buy Under $30

These three stocks all offer a huge deal for investors looking for dividends, as well as growth that will last.

Read more »

You Should Know This
Dividend Stocks

How to Convert a $300 Monthly Investment Into $338 in Monthly Income

If you want a certain amount in monthly passive income, invest a similar amount today and leave the rest to…

Read more »

Increasing yield
Dividend Stocks

3 Income Stocks With Big Yields to Consider in April 2024

If you haven’t yet made your March investments, here are three income stocks to buy the dip and lock in…

Read more »

Senior Man Sitting On Sofa At Home With Pet Labrador Dog
Dividend Stocks

RRSP Investors: Don’t Miss Out on This Contribution Hack!

This hack has so many benefits for you -- not just when you put it in your RRSP but for…

Read more »

A red umbrella stands higher than a crowd of black umbrellas.
Dividend Stocks

Passive Income: 2 Safe Dividend Stocks to Own for the Next 10 Years

Dividend stocks such as Manulife and Fortis can help you generate a stable and recurring passive-income stream.

Read more »

Young woman sat at laptop by a window
Dividend Stocks

3 Dividend Stocks Everyone Should Own for the Long Haul

For investors looking for top-tier dividend stocks to buy and hold for the long term, here are three of my…

Read more »