With the S&P/TSX Composite Index trading at all-time highs, most of the talk around the market this year has surrounded growth stocks. We’ve also witnessed a return of value investing, as many dependable, blue-chip companies are outperforming the market’s returns this year.
Passive-income and dividend stock investors can rest assured, though; there’s no shortage of Dividend Aristocrats trading on the TSX.
Canadian investors have their choice when it comes to building a passive-income stream. You can go the route of owning dependable companies that have been paying a dividend for decades or even centuries for some.
There’s also the option to own a dividend stock with a lower yield but more upside in the company’s long-term growth potential. It’s not unrealistic to own a top dividend-paying stock that can generate market-beating returns and yield above 3%.
Here are three picks that dividend seekers will want to have on their radars today.
When it comes to dependability, there aren’t many better options than utility stocks.
Utility providers, like Fortis (TSX:FTS)(NYSE:FTS), provide their customers with an essential service. Regardless of the condition of the economy, consumers and businesses will depend on their utility providers. As a result, revenue streams for utility companies tend to be much more predictable than what you’ll find in other industries.
If you’re building a passive-income stream, dependability should be part of your criteria when evaluating companies. A dividend you can count on could be more important to some investors than the yield itself.
You can’t go wrong with adding Fortis stock to a passive-income portfolio. The annual dividend of $2.02 per share earns investors a very respectable yield of 3.7.%. You can find higher yields on the TSX today, but not many can match the dependability of Fortis.
Bank of Nova Scotia
The Canadian banks have been among the top-performing TSX stocks this year. Even in a low-interest-rate environment, the Big Five have all managed to outperform the market’s impressive gains this year.
Growth isn’t the only reason to own a major Canadian bank, though. Many investors would argue that they own one of the Big Five for its dividend.
Shares of Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) are up a market-beating 20% year to date. And even with that strong run, the bank’s annual dividend of $3.60 per share still yields close to 4.5%. That ranks it as the highest yielding between the Big Five.
Not only does Bank of Nova Scotia own the top yield between its peers, but it also owns one of the longest payout streaks. The company has been paying a dividend to its shareholders for an incredible 188 years.
This dividend stock owns a 4.5% yield and a nearly two-century payout streak. It’s a lock for any portfolio looking to earn passive income.
Brookfield Renewable Partners
Last on my list is a pick for investors who are looking for a dividend stock that also provides upside through stock price appreciation.
Brookfield Renewable Partners (TSX:BEP.UN)(NYSE:BEP) may only yield just above 3%, but its growth has been crushing the market for years. Even better, I think that the growth is going to accelerate over the next decade.
Shares of the energy stock are up a market-crushing 130% over the past five years.
The $13 billion company is one of the world’s market leaders in the renewable energy space. It boasts an international presence with a product offering across a wide range of different renewable energy options.
If you’re thinking of adding Brookfield Renewable Partners to your portfolio, now would be a wise time. The energy stock is trading at an opportunistic discount of nearly 25% below all-time highs right now.