3 Dividend Stocks to Own for the Rest of Your Life

Canadians worried about a potential pullback should target dividend stocks like Canadian National Railway (TSX:CNR)(NYSE:CNI) today.

| More on:
Man making notes on graphs and charts

Image source: Getty Images.

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

The S&P/TSX Composite Index rose 36 points on July 15. The energy sector suffered another lousy day, as oil and gas prices have softened in recent weeks. Broadly, the TSX has been somewhat flat since the middle of June. This period of calm may have inspired some anxiety among investors. Today, I want to look at three dependable dividend stocks that you can hold for the rest of your life. Let’s jump in.

This dividend stock is chasing a crown on the Canadian market

Fortis (TSX:FTS)(NYSE:FTS) is a St. John’s-based utility holding company. In late 2020, I’d looked at two dividend stocks that were coming close to becoming dividend kings. A dividend king is a stock that has delivered at least 50 consecutive years of dividend growth. Shares of Fortis have climbed 7.2% in 2021 as of close on July 15.

The company unveiled its first-quarter 2021 results on May 5. Adjusted net earnings increased to $360 million, or $0.77 per share — up from $315 million, or $0.68 per share, in the prior year. Fortis’s five-year $19.6 billion capital plan aims to increase its mid-year rate base from $30.5 billion to $40.3 billion by 2025. This, in turn, is expected to support dividend growth of approximately 6% through the end of the projected period. That would push Fortis over the dividend king threshold.

This dividend stock last delivered a quarterly distribution of $0.505 per share. That represents a 3.6% yield. Moreover, Fortis possesses a solid price-to-earnings (P/E) ratio of 20.

Why I love this energy stock for the long haul

The energy sector may have encountered turbulence in recent weeks, but it has enjoyed a resurgence for most of 2021. Oil and gas prices have staged a strong rebound due to improved demand. Back in May, I’d discussed why Suncor (TSX:SU)(NYSE:SU) was a dividend stock worth snatching up in this climate. Shares of Suncor have climbed 27% in the year-to-date period.

Suncor unveiled its first-quarter 2021 results on May 3. The giant oil sands producer delivered net earnings of $821 million, or $0.54 per share, in Q1 2021 — up from a net loss of $3.5 billion, or $2.31 per share, in the first quarter of 2020. This blew away analyst expectations.

Last year, Suncor was forced to reduce its dividend payout in response to pandemic-related pressures. The dividend stock last paid out a quarterly distribution of $0.21 per share, which represents a 3% yield.

One more dividend stock that has major staying power

Canadian National Railway (TSX:CNR)(NYSE:CNI) is another top dividend stock that you can trust for the long term. Its shares have dropped 5.5% in 2021 as of close on July 15. The dividend stock is still up 3.5% from the prior year.

In Q1 2021, CNR reported earnings of $974 million or $1.37 per share — down from $1.01 billion, or $1.42 per share, in the prior year. However, adjusted profits were up marginally. CNR reported that traffic volume increased 5% in the quarter, which spurred it to boost adjusted diluted earnings-growth guidance for the full year. The company is set to release its second-quarter 2021 results on July 20.

CNR last paid out a quarterly dividend of $0.615 per share. That represents a modest 1.8% yield.

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 Ambrose O'Callaghan has no position in any stocks mentioned. The Motley Fool recommends Canadian National Railway and FORTIS INC.

More on Dividend Stocks

edit Back view of hugging couple standing with real estate agent in front of house for sale
Dividend Stocks

Why Real Estate Stocks Are a No-Brainer Addition to Your Portfolio

Real estate stocks, especially REITs, offer some distinct advantages over other types of stocks, making them must-have additions to most…

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

3 Top TSX Dividend Stocks to Buy for Monthly Passive Income

Top TSX stocks with monthly dividends now trade at cheap prices for investors seeking passive income.

Read more »

Canadian Dollars
Dividend Stocks

Create Free Passive Income and Turn it Into Thousands With 1 TSX Stock

If you can't afford to invest, you can certainly create passive income another way and use that to invest in…

Read more »

Payday ringed on a calendar
Dividend Stocks

Canadian Dividend Investors: 2 ETFs That Pay Monthly Income With High Yields

Dividend ETFs often pay out monthly distributions compared to dividend stocks.

Read more »

think thought consider
Dividend Stocks

2 Stocks I Own and Will Buy More of if They Fall

Stocks tend to go up in the long run. Therefore, buying a basket of diversified stocks on dips should lead…

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

2 Oversold TSX Dividend Stocks to Buy for Passive Income

Blue-chip dividend stocks such as Royal Bank of Canada and Manulife Financial pay investors a tasty forward yield.

Read more »

TFSA and coins
Dividend Stocks

TFSA Passive Income: 3 Solid Stocks to Earn $355 Every Month

Looking to earn steady passive income? Here are three solid TSX stocks that can help you earn a worry-free passive…

Read more »

Technology
Dividend Stocks

RRSP Investors: 2 Stocks to Buy in August for Dividends and Capital Gains

RRSP investors can still find top TSX dividend stocks trading at cheap prices today for a buy-and-hold portfolio.

Read more »