3 Reliable Dividend Aristocrats You Can Buy With Confidence

Dividend Aristocrats such as these three are some of the best and most reliable stocks to buy and hold for years.

| More on:
Golden crown on a red velvet background

Image source: Getty Images

Investors know that buying Dividend Aristocrat stocks has a tonne of advantages. For a company to be able to consistently pay a dividend, let alone increase it each year, it has to be a high-quality and well-established business in its industry.

However, while all Dividend Aristocrats constantly increase their payouts to investors, not all Dividend Aristocrats pay significant dividends. Some companies elect to pay a lower dividend and instead retain more capital to invest back into the business and ultimately grow at a faster rate.

Therefore, the Dividend Aristocrats list is one of the best places to find high-quality stocks to consider investing in, even if you’re looking for higher-growth stocks.

And in this environment, it’s certainly crucial to ensure you own high-quality companies. This way, they can continue to perform well or at least weather the storm as the economy worsens. In addition, you can have the confidence to hold them through periods when the market is underperforming.

So, if you’re looking for Dividend Aristocrat stocks to consider adding to your portfolio, here are three of the best, from rapid growth stocks to high-quality passive-income generators.

A top Dividend Aristocrat to buy now

One of the best Dividend Aristocrat stocks you can buy, and one that offers an attractive yield of 5.1%, is Telus (TSX:T), the massive telecom stock.

High-quality telecom stocks like Telus make for great investments because they offer essential services, earn tonnes of cash flow, and have significant long-term growth potential, as 5G technology becomes more popular.

Over the last five years, including through the pandemic, Telus’s earnings before interest, taxes, depreciation, and amortization (EBITDA) have increased by 36% or a compounded annual growth rate (CAGR) of 6.3%. Furthermore, Telus expects its EBITDA will increase between 9.5% and 11% in 2023.

With the stock trading down near the bottom of its 52-week range and offering a compelling dividend yield, it’s one of the top Dividend Aristocrat stocks that Canadian investors can buy today.

One of the best consumer staple stocks to buy and hold for the long haul

Telus is a great investment if you’re looking for a combination of dividend growth and capital gains potential. However, if you’re looking for higher-potential growth stocks, you may want to consider a high-quality company like Alimentation Couche-Tard (TSX:ATD).

Couche-Tard is one of the best Dividend Aristocrats you can buy because it’s a consumer staple stock, and, therefore, offers investors defensive qualities. At the same time, though, it’s an impressive growth stock that consistently expands its operations both organically and by acquisitions.

Over the last five years, Couche-Tard has increased its revenue by 66%, and more than doubled its EBITDA as well as its free cash flow. Furthermore, although the stock has grown at an exceptional pace as a result of the high-quality acquisitions it’s made in recent years, it’s also shown that it can grow organically.

So, it’s no surprise that Couche-Tard’s stock price is up by 93% over the last five years, a CAGR upwards of 14%. However, despite this impressive growth Couche-Tard’s forward price-to-earnings ratio as well as its forward enterprise value (EV) to EBITDA ratio, are both below their historical averages. Therefore, Couche-Tard is one of the best Dividend Aristocrat stocks to buy now.

A massive residential REIT with properties across Canada

In addition to Telus and Couche-Tard, Canadian Apartment Properties REIT (TSX:CAR.UN) is one of the best Dividend Aristocrats you can buy, especially if you’re looking for exposure to residential real estate.

Residential real estate is an industry that’s highly defensive but also offers tonnes of long-term growth potential. And with CAPREIT’s portfolio spread all across Canada, it’s a low-risk investment for investors looking for exposure to the space.

Over the last five years, for example, CAPREIT’s revenue has increased by 58%. Furthermore, its funds from operations have increased by 64%.

This impressive and consistent growth has led to CAPREIT’s stock growing in value by roughly 40% over the last five years. Furthermore, its distribution has increased by almost 15% over that stretch.

If you’re looking for a reliable and defensive Dividend Aristocrat stock that can provide both capital gains and dividend growth, CAPREIT is a top stock to consider today.

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 Daniel Da Costa has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alimentation Couche-Tard. The Motley Fool recommends TELUS. The Motley Fool has a disclosure policy.

More on Dividend Stocks

edit Woman calculating figures next to a laptop
Dividend Stocks

Get 25% Off This TSX All-Star Stock Today and Hold it for Life

If you're looking for a long-term hold, it doesn't get much better than this dividend stock, which is down 25%…

Read more »

analyze data
Dividend Stocks

Better RRSP Buy: BCE Stock or Enbridge Stock?

BCE and Enbridge look like cheap stocks today for RRSP investors.

Read more »

Dollar symbol and Canadian flag on keyboard
Dividend Stocks

TFSA: 3 of the Best Canadian Dividend Stocks to Buy This Year

These three Canadian dividend stocks are some of the best to buy for the long haul and have tremendous potential…

Read more »

Young woman sat at laptop by a window
Dividend Stocks

Why I’ll Continue Drip-Feeding This Superb Dividend Stock, Recession or Not

There is a long history of this dividend stock bouncing back post recession, which is why I'll continue to drip-feed…

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

TFSA Investors: Earn $60/Month With These 2 Top Dividend Stocks

BCE stock is one of two top dividend stocks that can help you achieve your tax-free income goals in your…

Read more »

financial freedom sign
Dividend Stocks

TFSA Investors: 2 TSX Stocks for a Legit Shot at $1 Million in 20 Years

Save and invest regularly in a diversified group of solid stocks for a legitimate chance of hitting $1 million and…

Read more »

edit Business accounting concept, Business man using calculator with computer laptop, budget and loan paper in office.
Dividend Stocks

How Much Do You Need to Invest to Get $400 a Month in Dividends?

Creating passive income this high doesn't come cheap, but you can still save about $30,000 investing today rather than at…

Read more »

bulb idea thinking
Dividend Stocks

Dividend Investors: 2 Stocks for Decades of Passive Income

Add these two TSX dividend stocks to your self-directed portfolio to generate passive income for decades.

Read more »