3 Steady TSX Stocks to Buy in September

Any low-risk Canadian investors can look into these three dividend stocks. Of the three, RBC stock appears to be cheapest in September.

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The market can be quite scary at times. Think of the 2020 market crash or the correction experienced in high growth stocks in the last year or so. At such times, steady TSX stocks can be big stabilizers in your diversified stock portfolio. Risk-averse investors can consider these steady Canadian stocks.

Fortis stock

Fortis (TSX:FTS)(NYSE:FTS) is well known for its long dividend-growth streak of almost half a century. Its dividend-growth rate has compounded consistently at about 6% per year in the last decade.

Its earnings and dividend growth are likely to stay steady, because it generates highly predictable revenues across 10 regulated utilities. Fortis’s multi-year capital plan aims for a rate-base growth rate of about 6% through 2026. Overall, the plan is low risk. Approximately 63% of the capital plan is in distribution and transmission investments. And 19% is in cleaner energy investments.

The resilient stock hardly ever goes on sale, because of its stability and predictability. At $58.25 per share at writing, it trades at a dividend yield of close to 3.7%, and the stock is fairly priced.

RBC stock

Royal Bank of Canada (TSX:RY)(NYSE:RY) is another steady TSX stock that produces resilient results from its diversified business. Its core business segments include personal and commercial
banking (37% of FY2021 revenue), wealth management (27%), capital markets (21%), and insurance (11%).

For the medium term, management targets an earnings-per-share (EPS) growth rate of over 7% and return on equity (ROE) of more than 16%. It posted better results than those percentages in the past three and five years.

In the fiscal year to date, its EPS dipped about 1%, which is not bad, given the big jump in earnings last year from the release of reserves from the higher provision of credit losses during the pandemic in 2020. Its recent ROE was also solidly at 16.7%.

The bank stock increases its earnings and dividends over time, which is why its stock price also rises over time. The dip of 15% and any further downside in the dividend stock is a good opportunity for low-risk investors to pick up shares for long-term investing. At about $123 per share at writing, it yields almost 4.2%.

Granite REIT

Granite REIT (TSX:GRT.UN) stock has pulled back with the rest of the sector. Rising interest rates have weighed on the valuation of real estate investment trusts (REITs). The stock is down more than 30% from its 52-week and all-time high.

The stock hasn’t been steady lately, but it has a proven track record of steady profitability in the long run. Specifically, the industrial REIT’s cash flow has been fairly stable and growing over time on a per-unit basis.

As the e-commerce trend continues, Granite REIT should experience strong demand for its industrial warehouses. Its portfolio consists of about 127 income-producing properties across the United States, Canada, the Netherlands, Germany, and Austria. The portfolio’s weighted average lease term is about 5.5 years. A growth catalyst could come from its 12 development properties or land.

The selloff provides an opportunity for investors to pick up shares at a fair valuation for a competitive initial cash distribution yield of 4.2%.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Kay Ng has no position in any stocks mentioned. The Motley Fool recommends FORTIS INC and GRANITE REAL ESTATE INVESTMENT TRUST.

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