The stock market has been very volatile over the past couple months. A lot of this volatility has been attributed to fears of rising interest rates. If rates are increased, it could be difficult for companies to borrow money and grow over the short term. This could explain why growth stocks have been hit much more significantly than dividend stocks. Regardless of what your portfolio looks like, investors should remember to keep a steady head during times like these. If you’re willing to buy stocks today, here are three dividend stocks you should consider adding to your portfolio!
Rising interest rates aren’t bad for all sectors
While many growth stocks have seen their value plummet due to a potential increase in interest rates, that’s not what’s been happening for stocks across all sectors. In fact, rising interest rates could be good for stocks in the financial sector. Historically, banks have seen profit margins widen as interest rates go up. Because of this, investors should consider adding shares of Bank of Nova Scotia (TSX: BNS)(NYSE: BNS) into their portfolios.
Bank of Nova Scotia is a member of the Big Five. This is a group of five large banks which dominate the Canadian banking industry. Of that group, Bank of Nova Scotia stands out because of its focus on international growth. With more than 2,000 branches and offices across 50 countries, it is Canada’s most international bank. Year to date, Bank of Nova Scotia stock has gained nearly 1%. This outperforms the TSX, which has fallen about 1% so far this year.
This financial company could see brighter days soon
Investors should also consider buying shares of Brookfield Asset Management (TSX:BAM.A)(NYSE: BAM). It has a portfolio of more than $650 billion in assets under management. This makes Brookfield one of the largest alternative asset management firms in the world. Although this stock is a behemoth within the financial sector, Brookfield stock has lost about 9% of its value so far this year. However, over the past week, Brookfield stock has recovered more than 5%.
One reason that Brookfield stock may have fallen more than its peers in the financial sector is because the stock acts more like a growth stock than the average financial company. Since its IPO in 1995, Brookfield stock has gained nearly 4,500%. Despite generating such large gains for investors over the past two decades, Brookfield stock has remained a lot more stable than popular growth stocks like Lightspeed, Nuvei, and goeasy.
Buy this top Dividend Aristocrat
If you’re interested in finding other companies to add to your portfolio today, it would be a good idea to look through the list of Canadian Dividend Aristocrats. This is a list of TSX-listed companies that have raised dividend distributions for at least the past five consecutive years. One company that investors should consider is Canadian National Railway (TSX: CNR)(NYSE: CNI).
With a dividend-growth streak of 25 years, it is one of 11 Canadian companies that would be classified as a Dividend Aristocrat by American standards. Investors can take advantage of a nearly 2% forward dividend yield when holding shares of this stock. Its payout ratio of 35.7% suggests that Canadian National could continue increasing its distribution with ease over the coming years. Year to date, Canadian National stock has traded flat, beating the broader market.
