September 2021 saw the stock market enter a troubled territory as it became one of the roughest months for the TSX this year. The sell-off frenzy does not compare to the one in February and March 2020, but it was one of the worst months in the pandemic since the market recovered from the sell-off in 2020.
The S&P/TSX Composite Index posted consistent declines until the start of October. The rapid recovery being posted by the Canadian benchmark index might be positive news for many investors who were worried that the TSX could be entering a prolonged bear market. However, the ups and downs are a sign of volatility that might be a cause for concern for many investors.
Investors with a long investment horizon and a solid plan might be phased by the short-term volatility. However, it should not let them make impulsive decisions. Provided that you allocate your funds to the right stocks, you might not have to worry about volatile periods in the future significantly affecting your shareholder returns.
Today, I will discuss two Canadian dividend stocks that you could add to your portfolio to grow your money meaningfully for the long term.
Fortis
Fortis (TSX: FTS)(NYSE: FTS) is a Canadian Dividend Aristocrat with a 47-year streak of delivering dividend hikes without fail. The electric and gas utility holdings company owns and operates 10 businesses providing services to around 3.4 million customers across Canada, the U.S., and the Caribbean.
It is a low-risk business that can continue generating revenues regardless of the broader economic landscape, making it an ideal investment to hold during volatile market conditions.
Fortis can fund its growing shareholder dividends comfortably because the company generates most of its revenues through highly rate-regulated and long-term contracted assets. It means that the company’s income is predictable, making it a safe bet for investors worried about the impact of a downturn affecting their passive income through its dividend payouts.
At writing, the stock is trading for $56.40 per share and boasts a 3.79% dividend yield.
AltaGas
AltaGas (TSX: ALA) is another long-term investment that you could consider adding to your portfolio without worrying too much about volatility in the market. AltaGas entails slightly greater capital risk than Fortis. A large part of the company’s revenues is made through its gas utility business. However, the risk comes through its midstream operations in the energy sector.
While its revenues are not as predictable as that of Fortis, AltaGas can offer capital growth to shareholders that utility businesses like Fortis can’t. The ongoing recovery in the energy sector is benefitting AltaGas. The company also has several new projects lined up that can provide a further boost to its revenues.
The stock is trading for $25.13 per share at writing and boasts a juicy 3.98% dividend yield.
Foolish takeaway
Dividend investing is one of the best ways to secure long-term wealth growth for your invested capital despite volatile periods in the market. Investing in reliable dividend-paying companies that can weather bear market conditions and provide you with consistent returns through dividends can help you keep growing your wealth, even if the share prices of the securities decline in the short term.
Fortis stock is an excellent bond proxy that can provide you with virtually guaranteed dividend income. AltaGas stock is another company that can provide reliable returns through a relatively low-risk business.
It can be safe to invest in the stock market right now, provided that you invest in the kind of assets that can reduce the risk for your capital. Fortis stock and AltaGas stock could be ideal investments for this purpose.
