TFSA Investors: 2 Dividend Stocks to Buy and Never Sell

Fortis Inc (TSX:FTS)(NYSE:FTS) and this other stock are perfect investments to buy and forget about.

| More on:
edit Balloon shaped as a heart

Image source: Getty Images.

If you don’t want to keep checking on your portfolio, consider adding some stable stocks that you can just buy and forget about. The two stocks listed below are safe investments that you can buy today and hang on for decades without worrying about what the markets are doing.


Fortis (TSX:FTS)(NYSE:FTS) stock belongs in every portfolio. It’s stable, it pays a great dividend, and the company is still looking for ways to grow. The utility stock is also recession-proof and can be a safe place to hold your money during a recession, pandemic, or in the face of any adversity. Demand for Fortis’s services isn’t going to disappear whether the economy’s doing well or not.

In each of the past three years, Fortis’s profit margins have come in over 12%. The company is in a good position to absorb a hit to its financials and still be able to post a profit. But that hasn’t been a concern for Fortis investors, as the utility company has consistently been in the black in each of the last 10 years.

The stock is a great buy without even touching on its dividend. Fortis currently pays its shareholders a quarterly dividend of $0.4775, which yields 3.7% annually. What makes it even better is that if you hang on to Fortis for decades, your payouts will get a lot larger over time. Three years ago, Fortis’s dividend payments were $0.40 per quarter, and they’ve risen by 19% during that time, averaging a compounded annual growth rate (CAGR) of 6.1%.

In five years, shares of Fortis are up more than 40%, soundly outperforming the TSX and its paltry 9% increase.

Toronto-Dominion Bank

Toronto-Dominion Bank (TSX:TD)(NYSE:TD) is another investment that you can’t go wrong with. The top bank stock has taken a beating this year, but that only makes it an even better buy. It may not be recession-proof like Fortis, and it will move along with the general direction of the economy, but TD is still not a stock you’ll have to worry about holding in your portfolio.

In each of the past three years, TD’s profit margin has been at least 28% of its sales. That’s a good chunk of the company’s top line, making it through to the bottom line. That makes it easy for TD’s profits to grow, which is what’s happened over the years. Its net income totaled $11.7 billion in its most recent fiscal year. That’s up 50% from the $7.6 billion TD reported five years ago. But as great as its financials look, the dividend is even better.

It may come as a surprise to investors that the conservative TD stock pays a better dividend than Fortis. A big part of the reason for that is TD stock is down around 20% this year, pushing its yield up in the process.

Currently, the bank’s quarterly payments of $0.79 yield 5.3% annually — if you buy the stock at $60, and even more if you can buy it at a lower price. The bank has increased its payouts by 32% in three years from the $0.60 that TD was paying its shareholders back in 2017. That averages out a to a CAGR of 9.6% — well above Fortis’s rate hikes.

A tough 2020 has put a dent in the TD stock’s five-year returns, which now sit around 14% compared to the more than 40% they’d be at it not for the pandemic. However, even at 14%, that’s still better than the TSX.

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 David Jagielski has no position in any of the stocks mentioned. The Motley Fool recommends FORTIS INC.

More on Dividend Stocks

rail train
Dividend Stocks

3 TSX Stocks I Own and Will Buy More of If the Stock Market Crashes

These TSX stocks may be down, but don't count them out. In fact, buy up as much as you can…

Read more »

stream movies at home
Dividend Stocks

3 TSX Stocks With High Dividend Yields

As markets continue to sell off, here are three of the best TSX dividend stocks you can buy to earn…

Read more »

analyze data
Dividend Stocks

Got $250? Here Are 3 Smart Stocks to Buy Now

Are you looking for some smart stocks to buy? Here are three options that offer growth and income that you…

Read more »

Profit dial turned up to maximum
Dividend Stocks

2 TSX Stocks to Buy With Dividends Yielding More Than 3%

These two TSX stocks offer ultra-high dividends and, more importantly, stability towards a solid future of passive-income payments.

Read more »

Female hand holding piggy bank. Save money and financial investment
Dividend Stocks

Passive Income: 3 Top TSX Stocks That Pay Dividends Monthly

Given their high yields, attractive valuations, and stable cash flows, these three TSX stocks are excellent buys for income-seeking investors.

Read more »

Man making notes on graphs and charts
Dividend Stocks

Put Your Cash to Work: 3 Cheap TSX Stocks (With Dividend Yields of +5%) to Buy Now

Make your money work for you. Earn over 5% dividend yields with these under-$20 stocks.

Read more »

edit Woman calculating figures next to a laptop
Dividend Stocks

2 Oversold TSX Stocks for TFSA and RRSP Investors to Buy Now

These top TSX dividend stocks look oversold.

Read more »

Pixelated acronym REIT made from cubes, mosaic pattern
Dividend Stocks

2 Top High-Yielding REITs to Beat Inflation

Real estate investors can beat the 7% inflation by investing in these two high-yielding REITs.

Read more »