Dividend stocks are some of the best investments to buy and hold long term. Stocks that pay a dividend and return passive income are often some of the best and safest businesses, which are well established and in a position to return cash to investors.
That’s what makes dividend stocks so attractive. It’s not just about earning dividend income alongside your capital gains potential. But buying dividend stocks allows your income from the investment to be a lot more predictable.
And because these stocks are typically well established and less volatile than their non-dividend-paying peers, the investment, in general, is less risky.
Not only that, but if you can find high-quality dividend-growth stocks, they won’t just return you cash all the time, they’ll constantly be increasing the cash they pay you.
This is crucial, because if you want to earn $500 a month of passive income, your portfolio will need to be worth $100,000 and yield 6%. Or it would have to be worth $150,000 and yield 4%. But even if you don’t have $100,000 to invest yet, buying these dividend-growth stocks will not only grow your portfolio, but they’ll also help your passive income to grow.
And soon enough, your portfolio will generate $500 a month and then, before you know it, a lot more than that. If you’re looking for high-quality dividend-growth stocks to buy now, here are two of the best to consider today.
Utilities are some of the safest dividend stocks to buy for growing passive income
If you’re looking to earn passive income from highly safe dividend stocks that have both stable operations and stocks that aren’t very volatile, a company like Emera (TSX: EMA) is one of the best to buy now.
Utility stocks like Emera have highly defensive operations, the industry is regulated by the government, and its assets are well diversified. It’s one of the lowest-risk stocks you can buy and commit to for the long haul.
Right now, Emera pays a dividend that provides investors with a yield of roughly 4.1%. Not only that, but the company has already announced in its guidance that going forward, it will increase that dividend between 4% and 5% each year through 2025.
This makes the company’s income and investors’ return potential a lot more predictable. So, if you’re looking to earn growing passive income for years, it’s crucial to find high-quality dividend stocks to buy, just like Emera.
A top Canadian telecom stock
Another high-quality business that dividend investors can buy and hold with confidence is BCE (TSX: BCE)(NYSE: BCE). While BCE is not quite as low risk as Emera, few stocks are safer than utilities. With that being said, though, BCE is a massive business with highly defensive operations that span the country. In addition, many of the services it offers are essential.
There’s no question that if you’re looking to earn safe and growing passive income from dividend stocks, BCE is one of the best to buy.
In addition to the fact that it’s so safe and defensive, BCE’s operations also make it a cash cow. This gives it plenty of capital to consistently increase the dividend as well as invest more capital into growth.
And considering the potential that 5G technology has and the massive expansion of BCE’s 5G network across the country, it has a long runway for growth.
Therefore, considering the stock offers a dividend with a yield upwards of 5%, it’s easily one of the best Canadian dividend stocks to buy for safe and growing passive income.
