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3 of the Best TSX Dividend Stocks to Buy Right Now

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Dividend stocks are not the first type of investment that comes to mind ahead of a potential economic rebound. As the country slowly begins to re-open this year, we may just see a strong stock market rally. As a result, certain growth stocks may soar to all-time highs, as the economy get back on track.

Dividend stocks typically aren’t among the fastest-growing companies, but that’s not why you own them in your portfolio. Blue-chip Dividend Aristocrats provide passive income and stability to an investment portfolio. That much-needed stability allows you to scoop up shares of ultra-expensive stocks like Shopify or Lightspeed POS ahead of a potential stock market rally.

If you’re looking to add a couple of dependable dividend-paying stocks to your portfolio, here’s a list of three top companies to add to your watch list.

Dividend stock #1: Algonquin Power and Utilities

Algonquin Power and Utilities (TSX:AQN)(NYSE:AQN) has something to offer all types of investors. It offers a high yield, market-beating growth potential, and dependability. 

The company’s annual dividend of $0.78 per share yields close to 4% at today’s stock price. Even at a yield that high, the dividend stock has still managed to more than double the returns of the Canadian market over the past five years. That’s not even including the 4% dividend yield either. 

The company manages to grow at a market-beating rate due to its exposure to the fast-growing green energy sector. Algonquin Power and Utilities generates energy for its customers through wind, hydro, and solar renewable energy sources. 

Dividend stock #2: Scotiabank

If you’re looking for a top dividend stock, you can’t go wrong with any of the major Canadian banks. Each of the Big Five yield just about 4% or more and own some of the longest dividend-paying streaks among all TSX stocks.

Scotiabank (TSX:BNS)(NYSE:BNS) yields close to 5% at today’s stock price. It’s been paying dividends to shareholders for more than 180 years. Scotiabank shareholders not only earn a top dividend yield, but it’s also one you can count on being paid out every quarter. But it’s not just the impressive yield that has Scotiabank on my watch list.

The second reason I’ve got my eye on this dividend stock is for its exposure to non-Canadian economies. While it’s not uncommon for a Canadian bank to have exposure to the U.S. economy, where Scotiabank differs from its peers is in its strong presence in Latin America. Close to one-third of the bank’s income is driven from South American countries. 

Dividend stock #3: goeasy

Last on my list of dividend stocks is the lowest yielding of the three. 

goeasy (TSX:GSY) may only yield a dividend of 2% at today’s stock price, but its market-beating growth potential should more than help make up for that. Over the past five years, shares of the financial services company are up an unbelievable 550%.

It’s hard enough to find another stock that has put up that much share price growth over the past five years, let alone one that also yields a dividend above 2%. 

What has me bullish on goeasy is that it’s in a prime position to explode during a stock market rally. As the country slowly begins to re-open, consumer spending should shoot way up. That could, in turn, lead to a massive rise in demand for goeasy’s services.

The $2 billion company offers its customers all kinds of financial services. Home and auto loans, credit monitoring services, and even leases for home furniture are just three examples of how goeasy serves its customers. 

A repeat performance over the next five years may be a lot to ask for this dividend stock. That being said, I don’t think it should have any trouble continuing to outperform the market.

Are you looking for more than just three top stocks to add to your portfolio? Check out this list of 10 picks from our professional investing team...

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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 Nicholas Dobroruka owns shares of Lightspeed POS Inc and Shopify. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Shopify and Shopify. The Motley Fool owns shares of Lightspeed POS Inc. The Motley Fool recommends BANK OF NOVA SCOTIA.

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