5 Buy-and-Hold Dividend Stocks for Investors in 2018

You can build your buy-and-hold stock portfolio by focusing on dividend-paying companies, such as  Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM).

The Motley Fool

Buy-and-hold portfolios work nicely for dividend investors, whose investment objective is to remain invested and grow their retirement income over time.

One key advantage for buy-and-hold investors is that they don’t have to worry too much about the daily market gyrations and quarter-to-quarter performance of their holdings. Once you have picked your stocks after proper homework, it’s better to stick with your investments.

The world’s most successful stock picker, Warren Buffett, offers a similar advice when people ask him how they should invest.

“The money is made in investments by investing,” Buffett told CNBC in an interview last year, “and by owning good companies for long periods of time. If they buy good companies, buy them over time, they’re going to do fine 10, 20, 30 years from now.”

His investment firm owns some top dividend companies which are generally engaged in boring and old businesses, such as IBM, American Express, Coca-Cola and Kraft Heinz.

For Canadian investors, 2018 offers some great buy-and-hold opportunities. All you have to do is focus on the companies that have a credible history of paying dividends. They should be in businesses that are not going away, even after 20 or 30 years.

Here are five top dividend companies I think offer good value and are good candidates for your buy-and-hold portfolio.

 Stock  Dividend Yield  Market Cap
 Enbridge Inc. (TSX:ENB)(NYSE:ENB)  4.96%  $82.5 billion
 BCE Inc. (TSX:BCE)(NYSE:BCE)  4.77%  $55 billion
 Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM)  4.79  $53 billion
 Brookfield Infrastructure Partners L.P. (TSX:BIP.UN)(NYSE:BIP)  3.04%  $22.5 billion
 RioCan Real Estate Investment Trust (TSX:REI.UN)  5.83%  $8 billion

Source: Yahoo! Finance 

If you notice in this chart, I have picked stocks that are the top players in their fields and currently are trading at attractive levels, providing yields closer to 5%.

For long-term investors, having exposure to Canada’s best utilities makes sense, as they support some of the highest yields and offer stability. The world’s largest pipeline operator, Enbridge, for example, plans to boost its dividend payouts 10% each year through 2020.  Its current ~5% dividend yield looks very juicy for the buy-and-hold portfolio.

Similarly, RioCan and BCE are the leaders in their respective fields. These types of stocks not only provide diversification to your portfolio, but they offer a hedge against a possible downturn in the market place, which can come anytime without warning.

Finally, Canadian banks are among the top dividend payers in Canada. On average, Canada’s top five banks distribute between 40% and 50% of their income in dividends each year.

Having Canadian Imperial Bank of Commerce in your buy-and-hold portfolio isn’t a bad idea, especially at a time when Canada’s economy is strengthening and outlook for the nation’s lenders is very bright.

The bottom line

Building your buy-and-hold portfolio doesn’t require you to be a market guru. All you need is a long-term investing horizon, patience, and stocks that are top-quality dividend payers.

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 Haris Anwar has no position in any stocks mentioned. The Motley Fool owns shares of Enbridge. Enbridge and Brookfield Infrastructure are recommendations of Stock Advisor Canada.

More on Dividend Stocks

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Dividend Stocks

TFSA Magic: Earn Enormous Passive Income That the CRA Can’t Touch

If you're seeking out passive income, with zero taxes involved, then get on board with a TFSA and this portfolio…

Read more »

Man with no money. Businessman holding empty wallet
Dividend Stocks

2 Stocks Under $50 New Investors Can Confidently Buy

There are some great stocks under $50 that every investor needs to know about. Here’s a look at two great…

Read more »

think thought consider
Dividend Stocks

Down 10.88%: Is ATD Stock a Good Buy After Earnings?

Alimentation Couche-Tard (TSX:ATD) stock might not be the easy buy-case it once was. Here’s a look at what happened.

Read more »

money cash dividends
Dividend Stocks

TFSA Dividend Stocks: Earn $1,200/Year Tax-Free

Canadian stocks like Fortis are a must-have in your portfolio to earn tax-free yields for decades.

Read more »

sale discount best price
Dividend Stocks

1 Dividend Stock Down 11 Percent to Buy Right Now

Do you want a great dividend stock down 11% that can provide years of growth potential? Here's one heavily discounted…

Read more »

Growth from coins
Dividend Stocks

1 Grade A Dividend Stock Down 11% to Buy and Hold Forever 

If you're looking for the right dividend stock at the right price, you're going to want to consider this insurance…

Read more »

Target. Stand out from the crowd
Dividend Stocks

2 Dividend Stocks to Double Up on Right Now

Are you looking for dividend stocks to buy right now? Here are two top picks!

Read more »

edit Taxes CRA
Dividend Stocks

Tax Time: How to Keep More of Your Money

Nearly everyone hates paying taxes, although Canadians can lessen the financial pain with the right tax strategies.

Read more »