There are a lot of dividend stocks out there right now that offer substantial passive income. However, when you’re looking at the top dividend stocks on the TSX today, it’s a different situation.
These companies are ones you can practically be sure won’t suddenly slice their dividend in half. Look to the past, and you’ll see some of the largest dividend producers have done this in recent history. So, even oil and gas companies and railways aren’t safe these days.
With a recession on the horizon, it’s time to look for stability. These are the top two dividend stocks I’d pick up on the TSX today.
Canadian Utilities (TSX:CU) continues to be one of the best options if you’re looking for long-term stable growth as well as dividend income. It remains the only Dividend King on the TSX today, though there are a few on its heels.
This comes from the stability of being a utility company. No matter what happens during a recession, this company will continue to see cash flow in thanks to long-term contracts and growth. With over 50 years of consecutive dividend increases, which adds up to several recessions, you can be sure the company will continue to raise its dividend for the foreseeable future.
That’s a future that would also include the shift to renewable energy. While Canadian Utilities stock is one of the dividend stocks that uses natural gas, it provides renewable energy options as well. This means that it should be a great way to transition seamlessly over to clean energy production in the near future.
Shares are on par with where they were a year ago, climbing finally after falling in the drop of utility stocks across the board in recent months. Shares trade at a fair 18.6 times earnings, with a dividend yield at 4.76%. That comes out as $1.79 per share annually. This dividend currently has a 10-year compound annual growth rate (CAGR) of 7.32% as well.
Another strong option to consider kind of goes hand in hand with utilities. Yet instead of purchasing utility stocks, you’re buying the dividend stocks that build utility stocks. They also build cell towers, roads, waste facilities, and other essential infrastructure.
Infrastructure is another incredibly stable option that investors can consider on the TSX today. These dividend stocks will also see cash coming in over the foreseeable future. And among them, Brookfield Infrastructure Partners (TSX:BIP.UN) is a solid option.
Brookfield stock has been on the market for some time, backed by its parent company that’s been in renewable energy and infrastructure since the late 1800s. Furthermore, it has a diverse range of assets, located in practically every corner of the globe. These are “long-life” assets, providing long-term growth and income for investors.
Yet shares of Brookfield stock are down 19% in the last year, rising 6.5% year to date as of writing. Shares trade at 2.28 times book value, with a dividend yield at 4.57%. That comes out at $2.09 per share annually. Finally, the dividend currently offers a 10-year CAGR of 10.59% among dividend stocks on the TSX today.