In most contexts, boring is not something most people strive to be. But when investing in dividends, boring is exactly what you should be seeking. If a company isn’t exciting, that means it’s reliable, and its future is relatively predictable. In these situations, you’re not going to hit any home runs, but you can feel your savings are secure, which should be the number one goal.
On that note, below are three such dividend-paying companies.
1. Fortis
There may be no stock in Canada more boring than Fortis (TSX: FTS). And that’s a compliment.
Fortis is Canada’s largest investor-owned publicly traded utility, which should explain why its earnings are so steady. After all, even if the economy is suffering, we still need to keep the lights on. As a result, Fortis has managed to raise its dividend every year for over 40 years, a remarkable achievement.
So even if this investment puts you to sleep, you’ll still be collecting a stable, growing dividend. And that dividend currently yields a healthy 3.9%.
2. TD Bank
The last ‘interesting’ year that Toronto-Dominion Bank (TSX: TD)(NYSE: TD) suffered through was 2002, when the bank incurred nearly $3 billion of credit losses in the wake of the tech bubble burst.
Since then, TD has consistently churned out stable earnings, and for that reason, it is often cited as a great staple for most portfolios. The bank even managed to avoid the fate of its American peers during the financial crisis.
Fast forward to today, and TD continues to churn out steadily growing income. And the shares aren’t overly expensive either, trading under 15 times earnings. As a result, the dividend yields 3.4%. In today’s low interest rate environment, that’s not a bad return for such a boring company.
3. Thomson Reuters
Thomson Reuters (TSX: TRI)(NYSE: TRI) has had its share of excitement in recent years, and I mean that in a bad way. First came the merger between Thomson and Reuters right before the financial crisis. Then came a botched release of its new financial product, Eikon.
But Thomson Reuters is still a boring company. This is mainly because its products are subscription-based, meaning that revenues tend to be very steady. Secondly, its largest division comes from the sale of legal products, which tends to be far smoother than financial services.
Thomson’s dividend yields 3.6%, again not bad for such a reliable dividend payer. As long as you’re willing to forego some excitement, this is yet another great option for your portfolio.
