3 of the Best Dividend Stocks to Load Up on Right Now

These three top TSX dividend stocks provide not only quality yields today, but dividend and earnings growth over the long term.

Dollar symbol and Canadian flag on keyboard

Image source: Getty Images

Dividend stocks may be out of favour right now. Indeed, given where interest rates are today, many investors are opting for higher exposure to growth stocks. Such a strategy certainly makes sense.

However, dividend stocks also provide excellent portfolio diversification and generally lower investors’ risk levels. These are typically highly defensive companies with higher-than-average cash flows. Distributing their earnings to shareholders allows investors to reap the benefits of growth today.

Accordingly, let’s take a look at three of the best dividend stocks in Canada right now.

Top dividend stocks: SmartCentres REIT

SmartCentres REIT (TSX:SRU.UN) is an excellent dividend stock to consider today. This real estate play provides excellent leverage to an economic recovery in Canada. At the same time, SmartCentres is highly defensive in the types of tenants it hosts in its locations. The company’s anchor tenants include some of the largest and most well-known blue-chip retailers in the world. Accordingly, even in the worst of times, SmartCentres is a retail REIT with extremely defensive cash flows.

The company owns over 155 properties and is now planning to prioritize residential development through 2021. The SmartVMC city center development, one of SmartCentres’s flagships, is only one of the five Transit City condos closing this fall.

I think this company’s 6.1% dividend yield is among the best in high-yield options on the TSX. For investors seeking consistent annual double-digit gains over the long term, SmartCentres is a stock to consider right now.

Algonquin Power

In the utilities space, Algonquin Power (TSX:AQN)(NYSE:AQN) is a top-notch dividend stock to consider right now. The company’s 4.4% dividend yield is extremely stable, supported by regulated cash flows and a growth-oriented renewables segment. Indeed, there are few stocks providing the mix of growth, income, and value as I see in Algonquin today.

Furthermore, the company’s very meaningful dividend yield is paid in U.S. dollars. Those worried about a strengthening U.S. dollar could invest in Algonquin as a hedge. All the while, Canadian investors can take advantage of the Canada dividend tax credit, boosting returns.

Algonquin has proven itself to be one of the best growth stocks in the utilities space over the years. A series of well-timed acquisitions has brought this company into focus among ESG investors due to the company’s growing exposure to renewables.

Accordingly, this is a dividend stock I think needs to be on long-term investors’ radar right now.

Fortis

Another utilities player I’ve been pounding the table on of late is Fortis (TSX:FTS)(NYSE:FTS).

This company’s business model is relatively similar to that of Algonquin, albeit with less renewables exposure. Fortis is a regulated utilities player with a very strong track record of cash flow growth. Accordingly, the company has made a point of being extremely consistent in raising its dividend — doing so each year for nearly five decades.

For investors seeking rising dividend income in retirement, Fortis is a top-notch pick. The company’s dividend yield of 3.6% is excellent, as is the company’s dividend-growth trajectory. Those seeking high-quality dividend stocks can’t go wrong owning Fortis. This is a company to buy today and forget about for a decade or two.

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 Chris MacDonald has no position in any stocks mentioned in this article. The Motley Fool recommends FORTIS INC and Smart REIT.

More on Dividend Stocks

Two seniors float in a pool.
Dividend Stocks

TFSA: How to Earn $1,890 in Annual Tax-Free Income

Plunk these investments into your TFSA to earn passive income and avoid the taxman.

Read more »

Engineers walk through a facility.
Dividend Stocks

1 TSX Stock I Wouldn’t Touch With a 10-Foot Pole

AtkinsRéalis (TSX:ATRL) is one TSX stock I'd never invest in.

Read more »

edit Woman in skates works on laptop
Dividend Stocks

3 No-Brainer Stocks to Buy Under $30

These three stocks all offer a huge deal for investors looking for dividends, as well as growth that will last.

Read more »

You Should Know This
Dividend Stocks

How to Convert a $300 Monthly Investment Into $338 in Monthly Income

If you want a certain amount in monthly passive income, invest a similar amount today and leave the rest to…

Read more »

Increasing yield
Dividend Stocks

3 Income Stocks With Big Yields to Consider in April 2024

If you haven’t yet made your March investments, here are three income stocks to buy the dip and lock in…

Read more »

Senior Man Sitting On Sofa At Home With Pet Labrador Dog
Dividend Stocks

RRSP Investors: Don’t Miss Out on This Contribution Hack!

This hack has so many benefits for you -- not just when you put it in your RRSP but for…

Read more »

A red umbrella stands higher than a crowd of black umbrellas.
Dividend Stocks

Passive Income: 2 Safe Dividend Stocks to Own for the Next 10 Years

Dividend stocks such as Manulife and Fortis can help you generate a stable and recurring passive-income stream.

Read more »

Young woman sat at laptop by a window
Dividend Stocks

3 Dividend Stocks Everyone Should Own for the Long Haul

For investors looking for top-tier dividend stocks to buy and hold for the long term, here are three of my…

Read more »