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Market Crash: 2 High-Yield Dividend Aristocrats to Buy on Sale

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As the coronavirus pandemic rages on, stock markets seem to be on the verge of recovering and then recovering each day. Indeed, there’s no telling how long the volatility will last. While it’s not the easiest time to be an investor right now, I advise you not to panic. Choosing high-quality dividend-paying stocks is challenging, but it might be the best option right now.

Picking safe dividend-paying stocks is easier said than done, however. Investors need to find assets that are well positioned to navigate the ongoing crisis. Both the U.S. and Canadian economies are in a state of deep freeze due to the mandatory shutdown. Most companies are struggling to preserve cash, and there are no signs of when the lockdowns can be lifted.

The oil price plunge made a one-two punch effect on the Canadian economy, but the OPEC deal might resolve the situation. Regardless of the deal, however, analysts are expecting that companies might announce dividend suspensions or cuts once they announce the first-quarter results in a few weeks.

Today I’m going to discuss the two companies that may offer regular dividend income to investors. Both the Royal Bank of Canada (TSX:RY)(NYSE:RY) stock and BCE Inc. (TSX:BCE)(NYSE:BCE) stock may have safe dividends.

Banking royalty

Canada’s Big Six banks have long been a reliable source for steadily increasing dividend income for shareholders. The banking sector’s major operators are among the best dividend-paying stocks in North America.

The healthy balance sheets and careful lending practices play a significant role in the success that banks have enjoyed.

The Royal Bank of Canada stock is one of the stocks suffering from the broad market pullback caused by this pandemic. RBC is the most prominent lender in Canada, with a substantial presence in the U.S. retail banking sector.

It’s among Canada’s most diversified financial institutions, with global asset management and capital market operations.

RBC’s diversity allows the bank to earn a stable income and enjoy a robust balance sheet compared to more localized banks in challenging market conditions.

The current payout for RBC looks safe despite the market correction. There are, however, concerns about the possibility of dividend growth in the near future. The depth of the current market downturn will affect its ability to increase its payouts to shareholders.

Telecom giant

BCE Inc. is one of the most significant telecommunications companies in the world. Telecom dividends are not likely to suffer in the current global health crisis due to the essential nature of the business. No matter how bad the economy gets, people still need to communicate with each other and need access to information.

BCE is the largest telecom company in Canada and is one of the best stocks to consider from the telecom sector. BCE offers diversified services to its clients, including home internet, media operations, and wireless internet, among much more. The company can still continue adding more subscribers to remain ahead of its closest peers through the recession.

With the rollout of 5G services, BCE can continue to see further growth in subscriber numbers. BCE said that it signed its first 5G wireless network supplier agreement with Nokia. It is also ready to deliver initial 5G services in urban centers across the country this year as 5G-capable smartphones enter the market.

Foolish takeaway

At writing, RBC is trading for $86.11 per share. It is down 21.15% from its February 2020 peak, and is offering a juicy 5.02% dividend yield to its shareholders.

BCE, on the other hand, is down by just over 11% from its February 2020 peak. It offers its shareholders a 5.74% dividend yield at a price of $58.00 per share.

In uncertain times like these, safe dividend-paying stocks are hard to come by. By the looks of the fundamentals for both RBC and BCE, the two companies could be favourable options to consider adding to your investment portfolio.

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.

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