4 of the Best Canadian Dividend Stocks to Buy Before a Market Correction

In this article, I’ll highlight four of the best Canadian dividend stocks that long-term investors can buy today.

Jitendra Parashar

Author Bio Jitendra Parashar is a financial journalist who has been writing for The Motley Fool Canada since June 2020. With more than 13 years of experience in financial journalism, equity research, and market analysis, he helps investors understand market developments and identify long-term investment opportunities. Before joining The Motley Fool Canada, Jitendra spent several years at Market Realist covering U.S. equities, major economic developments, and developments in the automotive and technology industries. He also worked in commodity and currency research at brokerage firms, gaining insight into how economic trends, central bank decisions, and geopolitical events influence financial markets. Jitendra writes for beginner investors, dividend seekers, and Canadians looking to build wealth over the long term. He also contributes to the daily TSX Today series, explaining key Canadian market developments and highlighting news investors should watch. Based in India, Jitendra follows Canadian and U.S. markets closely. Outside of work, he enjoys travelling in the Himalayas, street and nature photography, and exploring programming and artificial intelligence. Education MBA in Finance and International Business Bachelor's degree in Journalism Areas of Expertise Canadian and U.S. financial markets, long-term equity investing, dividend investing, macroeconomic and geopolitical trends, automotive stocks, emerging technologies, and artificial intelligence. Social Media Profiles LinkedIn Muck Rack Favorite Investment Quote “Simplicity is the master key to financial success.” — John C. Bogle

Published September 9, 2021 5:00 pm EDT

TSX stocks are trading on a mixed note in September 2021. Investors’ concerns about slowing economic growth amid rising Delta variant cases are affecting investors’ sentiments. Investing in dividend stocks for the long term could be the safest strategy to set aside short-term market sell-off or correction worries right now. In this article, I’ll highlight four of the best Canadian dividend stocks that long-term investors can buy today.

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BCE stock

BCE (TSX: BCE)(NYSE: BCE) is the largest Canadian communications company with a market cap of about $60.6 billion. Its stock has been trading on a positive note for the last eight months in a row. The company’s resilient business model, solid profitability, and impressive dividend yield of 5.2% make it one of my favourite Canadian dividend stocks to own right now.

The COVID-19-related headwinds affected BCE’s bottom line last year, as its adjusted earnings in 2020 fell by nearly 14% from the previous year. Despite the pandemic woes, BCE increased its dividend by about 5% in 2020 to $3.33 per share. Reopening economies and businesses and easing restrictions are helping its business recover faster than expected this year.

Enbridge stock

Enbridge (TSX: ENB)(NYSE: ENB) is the Canadian energy sector gem that rewards its investors with solid dividends. It currently has a notable dividend yield of 6.5%, as its stock trades at $51.28 per share. Despite COVID challenges, ENB raised its dividend per share by 9.8% last year. The company owns high-class energy infrastructure assets across North America. Its decades-long track record of consistent earnings and dividend growth makes it one of the best Canadian dividend stocks to own today.

Earlier this week, Enbridge acquired Moda Midstream Operating LLC — one of the key North American crude export facilities for US$3 billion. The deal is likely to significantly improve Enbridge’s competitive position in the oil export market and accelerate its financial growth further.

Hydro One stock

Hydro One (TSX: H) is my third recommendation for dividend investors right now. It’s Ontario’s largest electricity provider — with assets worth about $30.3 billion. Its dividend yield of about 3.4% might not look very impressive to many. Nonetheless, the company’s stable and transparent business model and strong balance sheet make it a part of my list of top TSX dividend stocks to buy right now.

In the first half of 2021, Hydro One’s earnings growth has remained strong. This consistent earnings growth along with higher revenues are likely to help the company expand its margins further in the coming quarters. Hydro One stock is trading at $31.72 per share at the time of writing with 11% year-to-date gains.

Canadian Natural Resources stock

Canadian Natural Resources (TSX: CNQ)(NYSE: CNQ) is another attractive TSX dividend stock from the energy sector. This well-known energy company is one of the largest Canadian natural gas and heavy crude oil producers.

CNQ stock currently has a dividend yield of around 4.4% at the current market price of $42.75 per share. But, more importantly, its track record of dividend growth has been outstanding. In five years between 2015 to 2020, the company’s dividend per share rose by nearly 85%. Overall, its diversified energy sector portfolio, quality assets, and stellar dividend and earnings-growth track record make Canadian Natural one of the best Canadian dividend stocks to buy.