The sure-fire way to grow your money and earn the highest potential returns is to invest dividend-paying stocks. Keep in mind, however, that not all dividend stocks are reliable dividend payers.
If you want a 100% guarantee of unceasing and perpetual dividends, pick the TSX stocks with the most extended streaking dividend payments. You would be taking a position of strength in the wake of uncertainties in the global markets.
Bedrocks of stability
Bank of Montreal (TSX:BMO)(NYSE:BMO) has the unsurpassed record as to consistency and longevity of dividend payments. If this bank could continue paying dividends until 2029, it would mark two centuries of dividend payments. BMO’s generosity to investors goes back to 1829.
BMO remains standing after facing recessions and cyclical markets during its 190 years of existence. Today, it’s the preeminent investor-friendly bank stock. BMO is not the largest bank in Canada, but the stock pays a respectable 4.3% dividend. The bank’s policy is to distribute 40-50% of its income as dividends.
Year to date, BMO is up 10.30% with analysts forecasting a potential capital gain of 15% in the next 12 months. After the 2008 financial crisis, BMO’s business grew through strategic investments and global expansion with more focus on the U.S. markets.
Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) started paying dividends in 1832. The Halifax-based bank has a network of 955 branches in Canada and operates 1,800 offices in foreign shores. Scotiabank continues to diversify and focus on emerging markets to unlock growth.
The goal is to maintain a competitive advantage that goes beyond the domestic arena. Scotiabank is active in Latin America and the Caribbean, where these markets form one-fifth of its commercial lending portfolio.
During the 2008 financial crisis, Scotiabank saw it necessary to reduce dividends. The bank quickly redeemed itself by accelerating the pace of dividend growth between 2010 and 2012. Since then, the bank continues to maintain a conservative payout ratio, which today stands at 51.65%, translating to a yield of 4.8%.
The strength of this $136.82 billion banking behemoth was apparent in the 2008 financial crisis. While many institutions were struggling to make profits, TD has managed to generate steady revenue and achieve earnings growth. In the aftermath of the crisis, TD’s aggressive expansion began.
Today, TD is one of the largest financial institutions in North America. Its consumer and commercial banking operations are stable in both Canada and the U.S.
Flour producers were the founders of the bank. After opening its doors to the public in 1856, TD started paying dividends the following year. Hence, its dividend history dated back 162 years ago. The current dividend yield is 3.9% with the option to raise your overall returns TD’s dividend-reinvestment plan.
The Canadian banking system is the best and safest in the world. Bank of Montreal, Scotiabank, and Toronto-Dominion Bank are the privileged class on the TSX. The bank stocks could turn average investors into wealthy shareholders.
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Fool contributor Christopher Liew has no position in any of the stocks mentioned. Bank of Nova Scotia is a recommendation of Stock Advisor Canada.