Boost Your Passive Income With These 2 Canadian Stocks

These Canadian stocks have reliable operations and are constantly increasing their dividends, making them ideal for passive income seekers.

| More on:
grow dividends

Image source: Getty Images

Whenever the stock market is selling off due to fear and uncertainty picking up, naturally, investors are a lot more cautious when it comes to buying stocks. That’s why in addition to diversifying your money across different industries and companies, you always want to own different types of companies. Top among those companies are Canadian dividend stocks that can boost your passive income.

During stock market sell-offs, higher-risk growth stocks tend to be much more impacted. On the flipside, reliable and defensive dividend stocks are almost always less volatile than the broader market, which helps to protect your capital.

Another benefit of owning Canadian dividend stocks that generate significant passive income is that your investments can still earn you a return in this environment.

That can be key and allow you to put that capital right back to work and buy other high-quality stocks while they trade at a significant discount.

So if you’re looking to boost your passive income today or just looking for reliable Canadian dividend stocks to add to your portfolio, here are two of the best to buy now.

This Canadian dividend aristocrat is one of the best stocks for passive income

If you’re an investor looking to boost your passive income, dividend growth stocks that constantly increase their payouts to investors each year are some of the best to buy. That’s why a high-quality utility stock like Fortis (TSX:FTS) is such a popular investment.

Utility operations are highly reliable and defensive since electricity and gas are so essential to residential and commercial customers. However, Fortis is also well diversified with utility operations all over North America, including parts of the Caribbean. This diversification helps to significantly lower risk.

In fact, the stock is so reliable, and its operations are so robust that you have to go back to 2012 to find a year when Fortis’ revenue didn’t grow year over year. That’s impressive consistency. And what’s even more impressive is that in the one year that sales didn’t manage to grow over the last decade, they only fell by 2.2%.

Earnings power

Furthermore, and more importantly for investors, is that Fortis’ normalized earnings per share (EPS) growth has had essentially the same consistency. In the last decade, Fortis’ EPS increased in all but two years. And both times when its normalized EPS declined, it was by 2% or less.

In fact, over the last decade, its normalized EPS has grown by 65%, an impressive growth rate for such a safe and reliable investment like Fortis. It’s not the fastest-growing stock on the market, but its consistent growth in earnings allows it to be much more reliable. Notably, it leads to consistent dividend increases each year.

So it’s clear why Fortis has one of the longest dividend growth streaks in Canada at 49 consecutive years of dividend increases.

Plus, with increasing interest rates pushing yields higher over the last year, investors can now buy Fortis and lock in a yield upwards of 4%. Consider that from late 2018 until late 2022, Fortis’ yield was below 4%, except for briefly at the start of the pandemic. That higher yield is creating an excellent buying opportunity today.

Therefore, buying Fortis stock today while it’s slightly undervalued and offers a compelling yield is a deal for passive income seekers.

A top Canadian telecom stock

In addition to Fortis, another excellent dividend stock that also offers attractive dividend growth is BCE (TSX:BCE).

Although a telecom stock isn’t quite as safe as a regulated utility like Fortis, BCE is still a top Canadian stock to buy for passive income generation.

Having access to quality communication services is crucial these days, which makes internet services as well as BCE’s wireless operations essential.

And because having access to these services is essential for so many consumers and businesses, it makes much of BCE’s revenue robust and reliable.

Therefore, it’s no surprise that BCE is another impressive Canadian dividend aristocrat. The Canadian stock has increased the passive income it pays to investors for 14 consecutive years. BCE stock currently offers a yield of roughly 6.5%.

So if you’re looking to boost your passive income or just buy reliable Canadian stocks, BCE is an ideal investment to buy and hold for years.

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 positions in BCE. The Motley Fool recommends Fortis. The Motley Fool has a disclosure policy.

More on Dividend Stocks

The sun sets behind a power source
Dividend Stocks

Forget Canopy Growth: 3 Utility Stocks to Buy Instead

These top Canadian utility stocks look like excellent buys to protect and grow your capital.

Read more »

Target. Stand out from the crowd
Dividend Stocks

1 Dividend Stock Down 30% to Buy Right Now

Keyera is an energy infrastructure company that pays shareholders a forward yield of almost 6%. Is KEY stock a good…

Read more »

oil and natural gas
Dividend Stocks

Suncor Stock Is Rallying: Should You Invest?

Energy stocks like Suncor Energy Inc (TSX:SU) are rising with oil pries.

Read more »

A worker gives a business presentation.
Dividend Stocks

TSX Communications in April 2024: The Best Stocks to Buy Right Now

Here are two of the best TSX communication stocks you can buy in April 2024 and hold for years to…

Read more »

Man considering whether to sell or buy
Dividend Stocks

Royal Bank of Canada Stock: Buy, Sell, or Hold?

Royal Bank of Canada (TSX:RY) has a high dividend yield. Should you buy it?

Read more »

Businessman looking at a red arrow crashing through the floor
Dividend Stocks

BCE’s Stock Price Has Fallen to its 10-Year Low of $44: How Low Can it Go?

BCE stock price has dipped 39% in two years and shows no signs of growth in the next few months.…

Read more »

Dollar symbol and Canadian flag on keyboard
Dividend Stocks

Invest $10,000 in This Dividend Stock for $3,974.80 in Passive Income

This dividend stock gives you far more passive income than just from dividends alone, so consider it if you want…

Read more »

Payday ringed on a calendar
Dividend Stocks

This 6% Dividend Stock Pays Cash Every Month

Can a 6% dividend yield help you build a monthly retirement income? An investment made right can help you build…

Read more »