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Canadian Investors: The Best Dividend Stocks to Buy This Year

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Whether you’re a young investor just starting out or a seasoned investor closer to retirement, dividend stocks will play an important role in a long-term portfolio.

When you buy a high-quality dividend stock, you know your capital is well protected. Dividend stocks are generally highly resilient. Plus, they return capital to shareholders, allowing investors to find new investments quicker and compound their money even more efficiently.

Whether you invest in dividend growth stocks that keep a large portion of their money and pay out only a small amount, or whether you buy more mature companies paying out a majority of their earnings, stocks that pay a dividend add another element to your portfolio.

That said, here are four of the best Canadian dividend stocks to buy this year.

Restaurant royalty stock

The first recommendation I would suggest investors consider is Pizza Pizza Royalty Corp (TSX:PZA).

Pizza Pizza is a great income stock, especially for beginners. The stock is a top choice because the business is super-high quality. Plus, it’s also very easy to understand. Understanding how the business operates is critical before you consider buying stocks for your portfolio.

Pizza Pizza receives a royalty from all the locations in its pool of restaurants. This income is then used to pay the company’s minimal administrative fees before it’s all paid out to shareholders. That’s why it’s so easy to understand and such a great stock for investors seeking income.

Because the stock aims to pay out all its earnings, investors will receive an attractive dividend. However, you likely won’t see much capital gain growth unless the income levels rise. That’s what investors are hoping for over the next year as Pizza Pizza continues to recover from the coronavirus pandemic.

So with the stock offering investors an attractive 6.8% dividend with the potential for more increases later this year, it’s an excellent investment to consider for 2021.

Telecom dividend stock

Another great stock to consider is Shaw Communications Inc (TSX:SJR.B)(NYSE:SJR).

All telecom stocks will be great dividend stocks, but Shaw offers investors exceptional growth potential on top of its dividend. The company’s wireline business has been highly robust during the pandemic. And its wireless business has a tonne of growth potential over the long-term, especially with its Freedom Mobile brand.

All that growth potential, in addition to the 5.3% yield it’s paying investors, makes Shaw the most attractive telecom stocks to buy today.

So if you’re looking for a dividend growth stock to buy for the long-term, Shaw is a top choice.

Top energy dividend stock

Enbridge Inc (TSX:ENB)(NYSE:ENB) is another top long-term stock like Shaw. The company’s operations are highly robust and critical to the North American economy. And because it’s a high-quality business that is growing its income consistently, the stock is also growing its dividend.

For 26 consecutive years, Enbridge has increased its payout to investors, highlighting just how impressive of a company it is. This includes 2020, through the coronavirus pandemic, when the energy industry was one of the worst impacted sectors of the market.

This shows how resilient its operations are, which is why it’s such a great dividend stock for long-term investors. Plus, at its current discount, not only is there considerable capital gains potential, but the dividend also yields an incredibly attractive 7.5%.

Utility stocks

Finally, a top dividend stock list would be incomplete without a utility recommendation. Utilities stocks are some of the most resilient businesses you can buy.

They have strong operations and pay out a significant amount of their income. Because of this, the stocks are much less volatile, making them ideal for investors looking for safer investments.

One of the top utility stocks you can buy is Fortis Inc (TSX:FTS)(NYSE:FTS). Fortis is an incredible investment for Canadians seeking a low-risk company. In addition to being a utility, its operations are well diversified, which helps keep risk levels extremely low.

That’s why so many dividend investors turn to companies like Fortis. The stock is incredibly high-quality and has increased its dividend for 47 consecutive years now. So if you’re looking for an investment that will pay a safe and growing dividend, Fortis is one of the best choices.

In addition to these four incredible dividend stocks, here are five highly attractive Canadian value stocks!

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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 Daniel Da Costa owns shares of ENBRIDGE INC and PIZZA PIZZA ROYALTY CORP. The Motley Fool owns shares of and recommends Enbridge. The Motley Fool owns shares of PIZZA PIZZA ROYALTY CORP. The Motley Fool recommends FORTIS INC.

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