Dividend stocks are some of the best investments to buy, not just because they return passive income. Dividend stocks are also some of the best long-term businesses that you can own.
Of course, receiving passive income quarterly is always pleasant. However, it’s even better when businesses are constantly increasing that passive income.
When you own stocks that increase their payouts to investors each year, not only is it more attractive, but it’s a sign that the business is high quality and will perform well and execute through thick and thin.
So, if you’re looking to add some passive income to your portfolio, here are two dividend stocks to buy now that have both increased their dividends each of the last five years.
A top Canadian utility stock
If you’re a passive-income seeker, utility stocks are some of the best stocks to buy for your portfolio. Utility stocks are low risk and low volatility, and they all pay safe dividends with attractive growth potential.
There are several attractive utility stocks to buy in Canada, but one of the best today is Emera (TSX: EMA).
Emera is a utility stock with operations all over North America, proving to be one of the safest investments and best stocks to buy to protect your capital. Plus, like other utility stocks, its business has so few risks that it has a good idea of how much growth its business will see in the coming years.
While Emera has increased its dividend by roughly 27% over the last five years and provides a yield of 4.1% now, it’s also expecting to grow that dividend between 4% and 5% every year through 2025.
Therefore, it’s clear that Emera is not only one of the safest dividend stocks you can buy, but it will also consistently increase the passive income it’s paying to investors.
A top Canadian telecom stock to buy for dividend investors
In addition to utilities, large-cap stocks with business models that allow them to be cash cows are also some of the best dividend stocks you can buy. That’s why major telecoms stocks are such high-quality investments. And of the major telecom stocks in Canada, one of the best to buy for dividend investors has to be BCE (TSX: BCE)(NYSE: BCE).
First and foremost, much like utilities, a lot of BCE’s revenue is highly robust. The fact that it provides communication services and access to the internet, something that’s essential in 2022, makes it a highly defensive company.
As I mentioned above, though, in addition to its defensive operations, what makes it such an excellent dividend stock is that it’s a cash cow.
When BCE installs equipment and expands its asset base by building telephone towers, for example, these assets can earn the company cash for years. And because these assets require little maintenance, BCE is constantly bringing in tonnes of cash flow.
So, not only is it highly robust, but through the pandemic, in addition to keeping its dividend in line and continuing to raise it each year, BCE also had the cash to continue investing in growth.
In just the last five years, BCE has increased the dividend at a nearly identical rate to Emera, up 28%. Plus, today, its dividend offers an attractive yield of 5%.
Therefore, if you’re looking for safe stocks you can buy that will pay you an impressive dividend and constantly increase the cash they’re paying out to you, then BCE is one of the best stocks to consider for your portfolio.
