Unlike growth stocks, dividend companies don’t tend to be as volatile. This means that seasonal swings in their stock value shouldn’t be as significant unless the industry is very cyclical. However, it would be wise to consider which companies provide more attractive opportunities. In this article, I will discuss three top TSX dividend stocks to own in June.
Canada’s top dividend company
At 47 years, Fortis (TSX:FTS)(NYSE:FTS) holds the second-longest active dividend growth streak in Canada. The company provides gas and electric utilities to more than 3.4 million customers across Canada, the United States, and the Caribbean. As of March 31, the company reported an asset portfolio worth $56 billion, making it one of the largest utility players in the world.
Year to date, Fortis stock has performed well, gaining about 5% (dividends excluded). Interestingly, Fortis stock has a beta of 0.06, which indicates that the stock has extremely low volatility compared to the broader market. Although the company’s dividend payout ratio is higher than that of other premier dividend stocks (73%), its extensive history of increasing dividend distributions should bring investors a feeling of comfort. This is undoubtedly one of the top dividend stocks in Canada.
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A Canadian favourite
Brookfield Asset Management (TSX:BAM.A)(NYSE:BAM) is one of the top dividend stocks in the country. The company is an alternative asset firm with exposure to the infrastructure, real estate, utility, and private investment industries. One reason for its popularity is that investors have a lot of respect for CEO Bruce Flatt. He is widely known as Canada’s Warren Buffett because of his long tenure as CEO, value investing style, and large ownership stake in his company.
Year to date, Brookfield Asset Management stock has gained more than 27%. While its forward dividend yield is lower than many dividend companies (1.04%), it possesses other qualities that make the company more attractive. Brookfield Asset Management has managed to grow its dividend for the past nine years, rendering it a Canadian Dividend Aristocrat. The company also has a payout ratio of 57.7%, which suggests it has sufficient room to continue growing its dividend in the future.
This stock should be a foundational company in your portfolio
Canada was built through the support of the railway. It’s only logical that your portfolio is as well. Not only is Canadian National Railway (TSX:CNR)(NYSE:CNI) a top dividend stock, but it’s also one of the top railway companies in the country. Canadian National operates the largest rail network in Canada and is a top stock within Bill Gates’ portfolio.
Last month, the company announced that it had entered a definitive merger agreement with Kansas City Southern. This would make Canadian National the first rail company to operate a network connecting Canada, the United States, and Mexico. Year to date, Canadian National stock is down about 4% (dividends excluded). However, this is a top company that is continuing to grow at a rapid pace. Investors should see this recent dip as an excellent buying opportunity.
Speaking of great stocks to buy in June...
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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 Jed Lloren has no position in any of the stocks mentioned. David Gardner owns shares of Canadian National Railway. The Motley Fool owns shares of and recommends Brookfield Asset Management and Canadian National Railway. The Motley Fool recommends Brookfield Asset Management Inc. CL.A LV, Canadian National Railway, and FORTIS INC.