Dividend stocks are, hands down, the most sure-fire way to make investment returns in the stock market.
As a shareholder, or owner, you know you’re getting a regular distribution from the company that you can use to pay bills, save for retirement, reinvest in the company, or even buy shares in a new investment altogether.
The risk, of course, being that, unlike interest payments on debt, dividends are elected to be paid by the company’s board of directors at their regularly held meetings. If the board elects not to pay a dividend, or even if it elects to reduce the amount of the dividend payout, it’s more than free to do so without any recourse to the company’s shareholders.
Fortunately, these three companies run a very low risk of that happening, so buy away and invest in these three dividend stocks today.
Royal Bank (TSX:RY)(NYSE:RY) is the largest company in Canada. It’s also intricately involved in almost every possible aspect of the country’s economy.
Of course, it holds deposits for millions of Canadians, but it is also responsible for providing financing to individuals and families who are looking to buy homes, it has an investment arm that helps Canadians to plan for their retirement, and it is also active in helping privately held and public companies raise capital to fund their business initiatives.
On top of that, Royal Bank has been busy investing overseas in recent years, as it works to build a more diversified business for owners to invest in.
Royal Bank increased its dividend by 7.4% last year, and the shares currently yield 4.04%, making this a very attractive dividend investment.
Suncor Energy (TSX:SU)(NYSE:SU) is Canada’s largest oil sands company.
The oil sands are a vast reserve of oil and bitumen deposits that will help to fuel the Canadian economy for years to come.
Suncor stock has sold off over the past couple of months, down a little more than 20% as oil prices have taken a bit of a dip. But the stock has shown signs of stabilizing in recent weeks with the MACD, a commonly followed technical indicator, showing a bullish signal at present.
SU stock yields 3.37% heading into the week’s trading. At a P/E multiple less than 10 times, this a solid value play.
Canadian National Railway (TSX:CNR)(NYSE:CNI) is another company integral to Canada’s economy in that it’s responsible for much of the transporting of intermodal goods.
A long time ago, CNR was actually a Crown company, meaning that it was owned by the federal government. And while it was under the control of the feds, the government used the company to serve the benefits of Canadians. That meant that CNR extended its rail network to rural areas that needed access to the rest of the country’s markets.
While that would have cost the company dearly and would have been an unpopular decision if it had been owned by short-minded shareholders at the time, the investment is paying off today.
CNR has a great network that makes it the preeminent rail stock for Canadians.
Shares yield 1.59% currently.
I may be in the minority here, but I would tend to hold off on purchasing CNR for now, maybe looking elsewhere in the meantime; see if you could perhaps get the shares for an even better price down the track.
Just one ticking time bomb in your portfolio can set you back months – or years – when it comes to achieving your financial goals. There’s almost nothing worse than watching your hard-earned nest egg dwindle!
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Stock #1 is a household name – a one-time TSX blue chip that too many investors have left sitting idly in their accounts, hoping the company’s prospects will improve (especially after one more government bailout).
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Fool contributor Jason Phillips has no position in any of the stocks mentioned. David Gardner owns shares of Canadian National Railway. The Motley Fool owns shares of Canadian National Railway. Canadian National Railway is a recommendation of Stock Advisor Canada.