The Motley Fool

3 Top Dividend Stocks to Build Your Portfolio Around

If you’re looking for a balance of dividends, growth, and stability, you’ve come to the right place. Oftentimes, when deciding where to invest, you have to make a decision and will need to sacrifice something, but that doesn’t always have to be the case. The three stocks I’m going to cover are great for any portfolio and would be great long-term investments.

Toronto-Dominion Bank (TSX:TD)(NYSE:TD) is one of the best, if not the best, bank stocks that you can invest in on the TSX. TD has a significant presence south of the border and is diversified enough to be able to handle any adverse economic conditions in its home market. That gives it an advantage over other bank stocks that might otherwise be more exposed to Canadian mortgage and housing issues, and it gives TD investors a great deal of stability.

TD’s expansion into other markets also has helped the company grow over the years. While TD is not a high-tech stock that will achieve astronomical returns, it can still provide investors with good, long-term growth. Over the past four years, TD’s net revenues have climbed nearly one-third, while profits have soared by almost 60%.

Strong financials have also allowed the company to pay investors a very healthy dividend of ~3.7%. In five years, dividend payments have grown by more than 65%, for a compounded annual growth rate (CAGR) of 10.6%.

TD stock has performed well over the years with its share price rising more than 70% during that time.

Fortis Inc. (TSX:FTS)(NYSE:FTS) is a big utility provider in this country, and a strong base of customers gives its top line a lot of stability, and it would even be appropriate to categorize it as a recession-proof stock given its necessary role in our day-to-day lives.

The company may be a utility provider, but you wouldn’t know it by the growth it has achieved over the years. Last year, revenues were up 21% and since 2013 have more than doubled. Although net income has seen a bit more volatility over the years, Fortis has still been able to average a profit margin of more than 10% during the last five years.

Like TD, Fortis offers investors a great growing dividend that currently pays shareholders more than 3.9% per year. In five years, payouts have grown by 37%, equating to a CAGR of 6.5%.

RioCan Real Estate Investment Trust (TSX:REI.UN) will help round out your portfolio and can help you to take advantage of rising property values. Although tenancy issues in the retail world have made investors bearish on REITs, RioCan’s innovative approach to that problem could result in tremendous growth, as it takes advantage of new opportunities.

Although it may not have achieved the same level of sales growth as the other two stocks on this list, RioCan’s top line has stayed above $1 billion in each of the past five years, as it too has a fairly dependable and diversified base of customers.

With a yield of more than 6%, RioCan will also provide you with the highest yield of the stocks listed here.

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 David Jagielski owns shares of RIOCAN REAL EST UN.

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