Got $3,000? 3 Top Dividend Stocks to Buy Today

Looking to build a passive income stream in your investment portfolio? Here are three top Canadian dividend stocks to get you started.

money cash dividends

Image source: Getty Images

Growth stocks made all the headlines in 2020. The pandemic led to a surge in tech stocks in particular. And with valuations of those high-growth tech stocks now getting to be stretched, we’re starting to see a rise in value stocks through the first three months of 2021. 

The TSX has no shortage of top dividend stocks. Whether you’re looking for a steady blue-chip Dividend Aristocrat or a high-yielding market-beater, there’s likely a dividend stock for you. 

I’ve reviewed three top dividend-paying comanies that any investor looking to build a passive income stream should have their radar. The three dividend stocks are all very different from each other, so there’s no harm in adding the basket of three companies to your portfolio.

Algonquin Power & Utilities

At the top of my watch list, I’ve got Algonquin Power & Utilities (TSX:AQN)(NYSE:AQN). The utility provider is also a part renewable energy company, so the high-yielding dividend stock has a growth element to it as well.

The dividend stock has seen its share price nearly double over the past five years. Considering its annual dividend of $0.79 per share yields 3.9% at today’s stock price, it makes that near-100% growth that much more impressive. 

The growth potential of the entire renewable energy sector is why I believe Algonquin Power & Utilities will continue to drive market-beating growth. But since it’s partially a utility provider too, it won’t benefit from the same growth levels that some other pure green energy stocks could see. That’s fine byme, though, as the utility part of the business will make this one of the more stable holdings in your portfolio. 

Sun Life Financial

The financial sector has been on a tear since the beginning of 2021. With lowered interest rates in 2020, it was a rough year for the major banks and other financial services companies. But with the reopening of the country around the corner, we’re beginning to see a rebound in many top undervalued financial stocks.

In addition to a 3.4% dividend yield, Sun Life Financial (TSX:SLF)(NYSE:SLF) is on my list of dividend stocks for two other reasons. 

First, the insurance business is not going away anytime soon. Individual consumers and businesses will always need a variety of different insurance policies. That makes Sun Life a reliable dividend stock you can feel good about holding for the long term.

Second, the financial stock’s valuation is far too low to pass up. The stock is trading today at a favourable forward price-to-earnings ratio of barely 10. It’s no wonder we’re seeing financial services stocks riding a strong bull run right now. Prices like this will not stay this low forever. 

Brookfield Infrastructure Partners L.P.

Much like Algonquin Power & Utilities, this dividend stock can also provide shareholders with market-beating growth and a top dividend yield. 

Brookfield Infrastructure Partners L.P. (TSX:BIP.UN)(NYSE:BIP) also provides investors with broad diversification across industries and geography. Through its global presence, the company owns and operates all kinds of businesses, including transportation, utility, energy, and data centres.

The dividend stock has crushed the Canadian market’s returns over the past five years. Shares of the infrastructure company have doubled since early 2016. And that’s not including the stock’s impressive 3.8% dividend yield either. 

Not only is the company’s stock price growing at a strong rate, but so is its dividend. The company has grown its distribution at a compounded annual rate of more than 10% over the past decade.

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 has no position in any of the stocks mentioned. The Motley Fool recommends BROOKFIELD INFRA PARTNERS LP UNITS and Brookfield Infrastructure Partners.

More on Dividend Stocks

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Dividend Stocks

TFSA Magic: Earn Enormous Passive Income That the CRA Can’t Touch

If you're seeking out passive income, with zero taxes involved, then get on board with a TFSA and this portfolio…

Read more »

Man with no money. Businessman holding empty wallet
Dividend Stocks

2 Stocks Under $50 New Investors Can Confidently Buy

There are some great stocks under $50 that every investor needs to know about. Here’s a look at two great…

Read more »

think thought consider
Dividend Stocks

Down 10.88%: Is ATD Stock a Good Buy After Earnings?

Alimentation Couche-Tard (TSX:ATD) stock might not be the easy buy-case it once was. Here’s a look at what happened.

Read more »

money cash dividends
Dividend Stocks

TFSA Dividend Stocks: Earn $1,200/Year Tax-Free

Canadian stocks like Fortis are a must-have in your portfolio to earn tax-free yields for decades.

Read more »

sale discount best price
Dividend Stocks

1 Dividend Stock Down 11 Percent to Buy Right Now

Do you want a great dividend stock down 11% that can provide years of growth potential? Here's one heavily discounted…

Read more »

Growth from coins
Dividend Stocks

1 Grade A Dividend Stock Down 11% to Buy and Hold Forever 

If you're looking for the right dividend stock at the right price, you're going to want to consider this insurance…

Read more »

Target. Stand out from the crowd
Dividend Stocks

2 Dividend Stocks to Double Up on Right Now

Are you looking for dividend stocks to buy right now? Here are two top picks!

Read more »

edit Taxes CRA
Dividend Stocks

Tax Time: How to Keep More of Your Money

Nearly everyone hates paying taxes, although Canadians can lessen the financial pain with the right tax strategies.

Read more »