Investing in dividend stocks could help you build a source of passive income. As that source of passive income grows, investors will be able to supplement and maybe even replace their primary source of income. This allows you to spend more time focusing on things you’re passionate about. Maybe that’s a hobby or spending time with your family. By focusing on stocks with high dividend yields, investors are able to get more bang for their buck. In this article, I’ll discuss three TSX stocks with high yields that you should buy today!
This is a top dividend stock
Fortis (TSX: FTS)(NYSE: FTS) is the first dividend stock that investors should consider buying today. This company provides regulated gas and electric utilities to more than three million customers across Canada, the United States, and the Caribbean. Because utility companies tend to receive income on a recurring basis, Fortis is able to plan for its dividend many months in advance. This has allowed the company to raise its distribution in each of the past 47 years. That gives Fortis the second-longest active dividend-growth streak in Canada.
Fortis stock also has a very attractive forward dividend yield of 3.59%. As a general rule for my portfolios, I tend to look for stocks that offer a dividend yield of 3-6%. I believe that range is high enough that investors can take advantage of greater value in each dollar invested, while also being sustainable on the company’s side of things. Fortis falls within that range and is known for being an excellent dividend payer. This first company should be an easy choice for any dividend portfolio.
It’s a great time to buy companies like this
It’s no secret that interest rates have climbed a significant amount over the past year. While that may be bad for growth stocks, it actually creates more favourable environments for bank stocks. In fact, historically, higher interest rates have led to wider profit margins for bank stocks. That’s why investors should consider buying shares of the Big Five banks today. If I had to pick one stock out of that group, it would be Bank of Nova Scotia (TSX: BNS)(NYSE: BNS).
Bank of Nova Scotia is impressive because of its long history of paying dividends. This stock first paid shareholders a portion of its earnings on July 1, 1833. Since then, it hasn’t missed a dividend. That represents more than 189 years of continued distributions. In addition, Bank of Nova Scotia stock offers investors a forward dividend yield of 5.25%. This is a premier TSX dividend stock.
Invest in this great company
Finally, investors should consider buying shares of Telus (TSX: T)(NYSE: TU). This company is one of the biggest players in the Canadian telecom industry. Alongside BCE, Telus operates the largest telecom network, providing coverage to 99% of the Canadian population. Over the years, Telus has also emerged as a leader within the healthcare space. It now provides a suite of solutions to healthcare professionals and for personal care.
Another outstanding dividend stock, I like the transparency that the company shows. It aims to maintain a dividend-payout ratio of 60-75% of its free cash flow. Telus also offers a very attractive forward dividend yield of 4.68%. By investing in this company, you’d get excellent value for your money.
