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2 Top Dividend Stocks to Buy Today

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With the S&P/TSX Composite Index consistently remaining near new all-time highs, the high valuations in the market today are giving rise to concerns about whether it is the right time to continue investing in high-growth stocks. As stocks become increasingly expensive, a market downturn could result in substantial losses when expensive stocks go through a correction.

Gaining exposure to high-quality dividend stocks that can provide you with consistent returns through reliable payouts and offer stability to your portfolio could be an ideal way to go right now. Buying and holding shares of the top dividend stocks and using them to create a Tax-Free Savings Account (TFSA) portfolio of income-generating assets could provide you with reliable wealth growth.

Today, I will discuss two of the top dividend stocks you could add to your TFSA dividend income portfolio.

A top banking stock

Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) stock is one of the best assets you can own among the Big Six Canadian banks right now. Scotiabank is not the largest Canadian bank in terms of its market capitalization. However, it is a reliable income-generating asset that also boasts solid upside potential for its investors.

The bank has been growing its presence in the Latin American market. The economies in countries like Mexico, Columbia, Peru, and Chile are slated to grow rapidly in the coming years. As these countries in Latin America become wealthier, Scotiabank’s presence in the market can significantly boost its growth and shareholder returns.

Scotiabank stock is trading for $81.03 per share at writing, and it boasts a juicy 4.44% dividend yield.

A top dividend stock

For years, Fortis (TSX:FTS)(NYSE:FTS) stock has been my favourite Canadian Dividend Aristocrat. The utility holding company boasts a stable and profitable long-term business model that has delivered solid dividend growth for its shareholders for decades. The company has increased its shareholder dividends for 47 consecutive years. If you are looking for a company that can virtually guarantee payouts, it does not get better than Fortis stock.

Fortis boasts a portfolio of several utility businesses that generate predictable revenues through long-term contracted and rate-regulated assets. It means that the company can use its predictable cash flows to comfortably fund capital investment projects to grow its rate base and its growing shareholder dividends.

Fortis stock is trading for $58.79 per share at writing, and it boasts a 3.44% dividend yield.

Foolish takeaway

Despite all the positive momentum we have recently seen in the stock market over recent weeks, it is important to remember that market corrections can happen at any time.

You should use the positive operating environment in the economy to capitalize on high-growth assets that can deliver stellar short-term returns. However, you should not forget to diversify your investment portfolio by adding defensive assets that can generate reliable long-term returns in your TFSA portfolio.

Fortis stock and Scotiabank stock could be ideal assets to consider for this purpose.

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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends BANK OF NOVA SCOTIA and FORTIS INC.

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