Passive-Income Investors: Now Is the Time to Buy These 2 Canadian Gems

Here are two top dividend stocks I think long-term investors seeking passive-income streams ought to consider in this uncertain market.

| More on:
diamonds, hidden gems

Image source: Getty Images

Investing in stocks with rising dividend payouts is a great strategy for those seeking passive income and excellent total returns over the long term.

Of course, building an income-producing, self-directed portfolio is easier said than done. Canadian investors have access to a vast array of dividend-paying TSX stocks. Thus, finding and making investments in high-quality dividend shares isn’t easy when there are so many great options to choose from.

With that said, there are certain stocks with defensive business models and high, growing yields, that I think are worth considering right now. Here are two of my top picks right now for those seeking long-term passive-income generation.


Fortis (TSX:FTS), provides regulated electric and gas utility services in the U.S. and Canada. With over 3.4 million gas and electricity consumers, this firm’s business model is highly defensive.

Accordingly, Fortis has transformed its extremely stable cash flows into rising dividend payouts over time. In fact, over the past five decades, the company hasn’t missed an opportunity to raise its dividend.

The most recent dividend hike came this past quarter. Fortis announced a dividend payment of $0.565 per share, increasing its distribution 6%. Thus, this is the 49th consecutive such hike, putting Fortis firmly in the Dividend Aristocrat camp.

At the time of writing, Fortis stock yields approximately 4.2%. That’s roughly on par with where medium-term bonds are, and given the company’s dividend-growth trajectory, there’s plenty of reason to hold this stock for those seeking long-term passive income.


Another top dividend stock I think is worth buying at these levels is leading pipeline operator Enbridge (TSX:ENB). Indeed, Enbridge’s value as an extremely defensive operator in a high-need business with stable cash flows is underrated. Additionally, I think the company’s 6.5% dividend yield is among the best in the business.

The company’s stock price performance has been relatively solid in recent months, with ENB stock making up much of its losses from its October lows. This has reduced the company’s relative yield. However, like Fortis, Enbridge has continuously raised its distribution over time. While I only expect the company to hike its distribution in the low-single-digit percentages moving forward, the company’s upfront yield is very enticing for those seeking immediate return on investment.

The company’s importance in providing North American energy independence should not be understated. Indeed, given the geopolitical situation right now, Enbridge remains a company that’s overlooked, but essential. Thus, I view this stock as one long-term investors seeking passive income should consider right now.

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 Chris MacDonald has positions in Enbridge. The Motley Fool recommends Enbridge and Fortis. The Motley Fool has a disclosure policy.

More on Dividend Stocks

stock analysis
Dividend Stocks

Buy These TSX Dividend Shares Next Week

Are you looking for dividend stocks to add to your portfolio? Buy these picks next week!

Read more »

edit Safety First illustration
Dividend Stocks

3 of the Safest Dividend Stocks in Canada

These three dividend stocks are all high-quality companies with defensive operations, making them some of the safest investments in Canada.

Read more »

A person builds a rock tower on a beach.
Dividend Stocks

3 Stocks to Anchor Your Portfolio in a Rocky Market

Three stocks are solid anchors in any portfolio today for their outperformance in a weak market and defiance of the…

Read more »

money cash dividends
Dividend Stocks

3 Solid Dividend Stocks That Cost Less Than $30

Given their solid financials and healthy cash flows, the following under-$30 dividend stocks are a good buy in this volatile…

Read more »

grow money, wealth build
Dividend Stocks

2 High-Yield Dividend Stocks With Rock-Solid Payout Ratios

These two dividend stocks offer unbelievably high yields of more than 7% and earn more than enough free cash flow…

Read more »

Dividend Stocks

5 Steps to Making $500 in Monthly Passive Income in 2023

Generating monthly passive income isn't as hard as it sounds. Here are 5 steps to start making $500 every month.

Read more »

sad concerned deep in thought
Dividend Stocks

Worried About a Recession? Invest in This Stable Dividend Stock to Rest Easy

Stable dividend stocks bought primarily for their payouts can offer you surety of returns, even during a recession.

Read more »

A golden egg in a nest
Dividend Stocks

How to Turn $50,000 Savings Into a Generous Nest Egg in 2 Decades

Build a generous nest egg in 20 years by investing your accumulated savings in Dividend Aristocrats and holding them in…

Read more »