3 of the Safest Dividend Stocks in Canada

Dividend stocks like Enbridge are reliable passive income payers in 2023.

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A safe and reliable source of income is rare. Either companies are overpaying dividends or deploying all their cash to fuel growth. That leaves little left for shareholders. Nevertheless, some companies are reliable cash machines. Here are the top three safest dividend stocks in Canada in 2023. 

Dividend Stock #1

The volume of oil and gas flowing across North America has intensified since the invasion of Ukraine. Europe now relies on natural gas exports from America to plug the gap left by Russia, and this dynamic is likely to be permanent. That’s a tailwind for Enbridge (TSX:ENB), the operator of the largest oil and gas pipeline network across the continent. 

Enbridge offers a sizable 6.8% dividend yield. That’s more than double the 2.9% offered by a five-year government bond right now. This yield is also likely to grow 5% to 6% every year for the foreseeable future as the company expands its network and the demand for energy continues to boom. 

This is an obvious bet for investors who understand the global energy supply crunch we’re currently living through. 

Dividend Stock #2

Budget fast food could be considered a recession-resistant segment of the economy. Consumers cut back on eating out during recessions but discounted pizza is a great alternative. 

Pizza Pizza Royalty Corp. (TSX:PZA) indirectly owns the Pizza Pizza, Pizza 73, and Marks brands across Canada. Revenue from this network increased 15.2% last year as more consumers turned to takeout food in the midst of rising food costs. Consequently, the company also raised its dividend by 16.7% last year. 

PZA now offers a sizable 6.3% dividend yield. The stock is also trading at a price-to-earnings ratio of 16, which makes it more attractive for conservative investors.  Keep an eye on this delicious dividend opportunity. 

Dividend Stock #3

Canada’s highly consolidated telecom sector is a great source of dividends. The top three largest telecommunications companies control the market. That means Canadian phone subscribers pay some of the highest data charges in the world. It also means telecom investors can expect some of the best dividend yields in the sector. 

Bell Canada (TSX:BCE) offers a 6.35% dividend yield. That’s more than double the yield on a government treasury bond for five years. This payout is likely to increase as the domestic market grows organically.

 

Canada’s population is growing at the fastest pace in the developed world. Last year, we received over one million new immigrants. These are all potential new subscribers to Bell. Meanwhile, Bell remains one of the few companies capable of sustaining and expanding an expensive network of cell towers across this large country. 

Put simply, Bell’s market dominance and future growth are secured.  Investors can rely on these dividends for several years if not decades in the future. 

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 Vishesh Raisinghani has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy.

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