Finding that perfect mix of investments for your long-term portfolio takes time. Fortunately, the market gives us plenty of great options to consider, including these two top TSX stocks to buy that I’m looking at buying this month.
Stock #1: Bank of Nova Scotia
Bank of Nova Scotia (TSX:BNS) is one of Canada’s big banks but is neither the largest or most well known. Scotiabank is known as Canada’s most international bank, and it is that distinction that separates Scotiabank from its peers.
Specifically, rather than expanding into the U.S. market like its peers, Scotiabank opted to expand further south into Latin America. The bank operates branch networks across the Pacific Alliance nations of Mexico, Columbia, Chile, and Peru.
Collectively, the developing nations represent a higher-risk, higher-reward arrangement for investors. The arrangement has paid off so far, with Scotiabank’s international segment seeing strong growth.
The flip side is that risk. Inflationary pressure is a global issue and that could spill over into Scotiabank’s expansion markets over time. The key point for investors considering top TSX stocks to buy like Scotiabank is that these are long-term investments.
And that’s where Scotiabank’s juicy dividend comes into play. Scotiabank offers investors a quarterly dividend with an impressive yield of 6%. Suffice it to say, this is the highest yield among Scotiabank’s big bank peers and one of the best yields on the market.
Going back to that long-term potential, prospective investors should note that Scotiabank has paid out dividends without fail for nearly two centuries. The bank has also provided an uptick to that dividend on an annual basis, with the only gap coming during the pandemic.
Stock #2: BCE
BCE (TSX:BCE) is one of the largest telecoms in Canada. Telecoms are incredibly defensive investment options that do well in any well-diversified portfolio.
In the case of BCE, the telecom also boasts a massive media segment in addition to its core subscription-based services. This provides the company with an additional revenue stream that is also complementary to its core business.
But why is BCE one of the top TSX stocks I’m looking to buy this month?
First, let’s talk about that defensive appeal I mentioned above. The pandemic forced many of us to transition into remote settings for work and study. This has made a fast and reliable home internet connection one of necessity.
The same could be said for BCE’s massive wireless segment. The pandemic pushed consumers towards mobile commerce. That transition was already occurring, but when physical stores closed, that transition accelerated.
And like the need for a fast home internet connection, the transition to mobile-first commerce has stuck with many consumers. In fact, in the most recent quarter, BCE reported an impressive 122,621 mobile phone activations, reflecting an 11.8% increase. Overall, revenue from BCE’s wireless segment topped $2,666 million, reflecting a 7.7% increase over the prior year.
The other point that makes BCE one of the top TSX stocks to buy this month is the company’s lucrative quarterly dividend.
BCE has provided investors with a juicy quarterly dividend for well over a century without fail. Today, the yield on that dividend works out to an appetizing 6.39%. This means that a $40,000 investment in BCE will generate a first-year income of over $2,550.
Finally, BCE has provided annual increases to that dividend for well over a decade without fail, and the most recent uptick came earlier this year.
The top TSX stocks to buy
No stock is without some risk, and that includes both of the stocks mentioned above. Fortunately, both stocks are well established in their respective segments and provide some defensive appeal.
In my opinion, one or both of these top TSX stocks to buy would do well in any well-diversified portfolio.
