2 High-Yield Dividend Stocks to Buy and Never, Ever Sell

Fortis and Canadian Imperial are both buy-and-hold stocks you should add to your portfolio and forget about them while they grow.

| More on:
Index funds

Image source: Getty Images

A lot of people work hard their entire lives to make money and build up their wealth. Saving money, putting it aside, and never touching it is a good sentiment, but I think it is futile. The entire amount you save should never be left to sit idle. As you keep working to earn more money, you should use the money you have saved to work for you.

Luckily, there are various tools you can use to make your money work for you. The Tax-Free Saving Account (TFSA) is perhaps the most useful option to that end. Any assets you store in the account stay there tax-free. Any earnings from the assets in the account will also accumulate in the account without additional charges or management fees.

I am going to discuss Fortis (TSX:FTS)(NYSE:FTS) and Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM). Stocks from both companies pay investors a decent amount in dividends. Other than capital gains from the share prices of both companies, you can accumulate even more wealth in your TFSA, thanks to the reliable dividend payouts.

Let us take a look at both the stocks to see if you should consider adding them to your investment portfolio.

Fortify your portfolio

One of the qualities of a stock you should buy and hold forever is that it needs to be able to perform well, despite the headwinds of recessions and business cycles. It is not the only requirement, but it is smart to have a stock that will remain stable. The utility sector is an excellent industry to look for such a company, and I think Fortis has plenty going for it.

The company has a remarkable balance sheet. Fortis also boasts an excellent dividend-growth track record spanning 45 years. The company has not just paid its shareholders dividends for more than 40 years. It has increased the amount it pays in dividends each year. The dividend-growth streak has made Fortis a Canadian Dividend Aristocrat.

Fortis continues to perform well, as it offers stability to its shareholders. A dividend yield of 3.68% at writing with a share price of $51.88 makes FTS a solid buy.

Banking royalty

Canadian Imperial Bank of Commerce is among the top banks of the banking sector. All the fundamentals for CIBC hit the right chords when you want to consider a company to buy and hold forever. The company has more than just a healthy dividend yield of 5.01% at $86.62 per share, and it has diversified operations.

The payout ratio for CIBC, in particular, is a significant factor to consider. A 48.38% payout ratio means that the company is currently paying less than half of its earnings as dividends. The payout ratio means there is room for the company to grow its payouts to shareholders, even further as it makes more profits.

The company’s exposure to international markets means it can rely on other market segments to mitigate any volatility in domestic operations. CIBC also has a return on equity at 14.32%. It means CIBC is easily able to afford its dividends and can continue to pay more in the long-term future.

Foolish takeaway

Fortis and CIBC can both pay you reliable dividends while continuing to grow. Buying and holding stocks from both companies can help set you up for life. I think that both stocks are excellent picks for long-term investors who want to make their money work for them.

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 Adam Othman has no position in any of the stocks mentioned.

More on Dividend Stocks

A person builds a rock tower on a beach.
Dividend Stocks

CPP Pension: Boost Your Payouts by $5,232 per Year

You can raise your after-tax CPP by making RRSP contributions. Alimentation Couche-Tard (TSX:ATD) is a good RRSP stock.

Read more »

A close up image of Canadian $20 Dollar bills
Dividend Stocks

3 No-Brainer Stocks to Buy With $20 Right Now

Here are three no-brainer stocks that are suitable for anyone getting started on their investing journey.

Read more »

growing plant shoots on stacked coins
Dividend Stocks

3 Top Dividend Stocks That Keep Raising Their Payouts

These three TSX stocks are ideal buy as they consistently raise their payouts, depicting their healthy financials.

Read more »

Senior Man Sitting On Sofa At Home With Pet Labrador Dog
Dividend Stocks

This 5% Dividend Stock Pays Cash Every Month

This monthly dividend stock offers cash every month, but also returns that continue to climb higher from being in a…

Read more »

Solar panels and windmills
Dividend Stocks

How Much Will TransAlta Renewables Pay in Dividends This Year?

TransAlta Corporation’s (TSX:TA) acquisition of TransAlta Renewables stock holds significant implications for income-oriented investors who previously held this monthly dividend…

Read more »

Dividend Stocks

3 Stocks That Can Help You to Get Richer in the Next 5 Years

Consistent growth stocks with a relatively bright future are one of the most trustworthy ways to grow wealth.

Read more »

Dividend Stocks

3 Blue-Chip Stocks Every Canadian Should Own

These Canadian blue-chip stocks are backed by well-established businesses and a growing earnings base, enabling them to generate above-average returns.

Read more »

grow money, wealth build
Dividend Stocks

Is This 7.25%-Yielding Dividend Grower the Ultimate Income Stock?

This top Canadian dividend stock has increased the distribution annually for nearly three decades.

Read more »