As markets continue to display volatility, long-term investors can find peace of mind with blue-chip stocks. In particular, Dividend Aristocrats are offering solid value to investors in it for the long run.
Over time, investing in healthy Dividend Aristocrats is a path to high total returns. The upside in share price, coupled with the strong and reliable dividend, makes this type of investment a win-win over a long horizon.
Especially in times like these, a solid dividend is hard to come by. So, it’s important to pick stocks that stand a good chance to maintain their yields.
Today, we’ll look at two blue-chip TSX stocks that are ready to keep pumping out dividends.
Dividend Aristocrat: BMO
It also has one of the stronger U.S. footprints among the major Canadian banks. So, its cash flow streams are a bit more diversified geographically than some of its competitors.
As it’s a large Canadian bank, it should be no surprise BMO is a top Dividend Aristocrat. The banks, particularly BMO, are known for stable earnings and dependable yields.
BMO is a well-capitalised stock with a strong balance sheet. So, it should be prepared to ride out turbulence in the near term.
BMO has rarely faltered in the past, so with healthy books and the Government’s full support, I wouldn’t bet against BMO now either.
As of writing, BMO is trading at $68.69 and yielding 6.17%. At these levels, BMO’s P/E ratio is low relative to the trailing figure and its yield is much larger than the trailing figure.
BMO therefore appears to be offering investors solid value for long-term growth and income.
For long-term investors, a 6.17% yield might just be too good to pass up, especially because it’s coming from one of the strongest Canadian bank stocks on the TSX.
Dividend Aristocrat: National Bank
National Bank of Canada (TSX:NA) is another major Canadian bank. It’s much smaller than BMO by market cap, and is the sixth-largest bank in Canada.
Like most stocks, this Dividend Aristocrat has been beaten up with the market volatility. It’s now trading at levels that make it an interesting option for the long run.
As of writing, National Bank is trading at $55.80 and yielding 5.09%. Similar to BMO, this represents a decent value to investors. However, National Bank is not as cheap relative to its trailing P/E figure as BMO.
Ultimately, National Bank is a smaller stock, but still a Dividend Aristocrat nonetheless. Some investors prefer the smaller bank stocks because they believe there is more upside in their growth.
While this is a fair angle to take, I personally would look at a stock like BMO and figure it’s a better value with more safety than a stock like National Bank.
The bottom line
Whichever way you slice it, Dividend Aristocrats are attractive long-term options now. Both BMO and National Bank are good examples of stocks offering value for the long run.
While either would generate solid total returns, BMO might be a better pick as it has a stronger yield and a better overall track record for growth.
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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 Jared Seguin has no position in any of the stocks mentioned.