Motley Fool investors that have been reading out articles for a while should know all about dividend stocks. But the problem is, during the last year, we’ve been in hit by a lot of volatility — both personally and financially. Growth stocks in particular have had some investors thinking maybe they shouldn’t be looking for the best dividend stocks Canada has today. Instead, maybe they should seek out stocks with high returns.
But here’s the reality. If Motley Fool investors invest long term in the best dividend stocks, you’ll see returns that far outweigh practically any growth stock. Growth stocks could climb from $2 to $50, and still, I would choose the best dividend stocks around. That’s because over decades and reinvesting those dividends, you can create massive wealth.
Don’t believe me? Let’s look at the three best dividend stocks that haven’t changed in decades and where your wealth could be 20 years down the line.
The top choices
Now it doesn’t just come down to dividend yield when looking for the best dividend stocks. You have to find companies that provide stable, long-term income — companies that are not just going to exist in 20 years, but that will be thriving.
First on my list is pipeline company Enbridge (TSX:ENB)(NYSE:ENB). Enbridge stock has one of the highest dividend yields on the TSX at 6.84% as of writing. Enbridge stock is supported by long-term contracts that will continue to see decades of wealth come in. And best of all, its growth projects are some of the few pipeline projects actually approved to be built. In the last decade, shares of Enbridge stock have been a bit up and down, but dividends were stable. There’s likely to be far more stability in the future, making this one of the best dividend stocks to buy today.
Another one of the best dividend stocks to consider are those in the utility sector. And if Motley Fool investors want stability, it doesn’t get better than Fortis (TSX:FTS)(NYSE:FTS). The company is the first on the TSX to reach Dividend King status. That means it’s been upping its dividend yield each year for 50 years. This is supported by its acquisition strategy of buying up utility companies, seeing revenue grow, then buying even more. The yield sits at a stable 3.44% as of writing.
Finally, the Big Six banks are the best when it comes to stability. Sure, they may fall during a market crash. However, each will bounce back within a year’s time. This has happened through several market crashes. Of those, I would pick Canadian Imperial Bank of Commerce among these of the best dividend stocks. It offers the highest at 3.92%, and is the top analyst recommendation.
Get the best dividend stocks now
Let’s look at where your dividends might be over the next two decades. By looking at each of these company’s compound annual growth rate in both shares and dividends, we can see where each might be two decades from now. If you were to invest $5,000 in each of these stocks today, in 20 years, you could have a total of $447,778.69! That’s almost half-a-million dollars, so it’s no wonder these are some of the best dividend stocks around.
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 Amy Legate-Wolfe owns shares of ENBRIDGE INC. The Motley Fool owns shares of and recommends Enbridge. The Motley Fool recommends FORTIS INC.