3 Top Dividend Stocks for Canadian Investors in 2023

The market’s volatility can be very unsettling, but Canadian investors can contain the risks by holding the safest dividend stocks.

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The stock market will have good and gloomy days, because that is its natural cycle. Seasoned investors understand that the market has lows, and when there’s elevated volatility, like there is today, the value of your investment will shrink to some degree.

However, risk-averse income investors who rely on dividend earnings fight the headwinds by holding low-volatile stocks. TELUS (TSX:T), Fortis (TSX:FTS), and Brookfield Renewable Partners (TSX:BEP.UN) are safer choices because of their low-risk profiles. These dividend stocks also outperform the TSX year to date.

Powerful asset mix  

TELUS needs no in-depth evaluation and requires no forceful sales talk. The $38.9 billion company provides essential telecommunications products and services 24/7. At $27.05 per share (+4.87% year to date), you can partake of the 5G stock’s 5.16% dividend.

Darren Entwistle, TELUS’s president and chief executive officer (CEO), said the company’s highly differentiated and powerful asset mix leans towards high-growth, technology-oriented verticals. He marveled at the double-digit revenue growth of TELUS International, a fast-growing subsidiary and technology company that supports the mother company’s growth profile.

In 2022, net income and cash provided by operating activities rose 1.2% and 9.6% to $1.71 billion and $4.81 billion versus 2021. Free cash flow (FCF) in the fourth quarter (Q4) of 2022 climbed 651% to $323 million. The 1,043,000 customer additions last year were a new record high for TELUS.

For 2023, Entwistle expects FCF to be around $2 billion, or approximately 60% higher than in the previous year. Last year, the total $1.35 billion dividend payment was 6.7% higher than in 2021.

Defensive all-star

Fortis, a defensive all-star, buys you peace of mind for its bond-like features. The utility stock trades at $56.86 per share (+6.02% year to date) and pays a decent 3.98% dividend. Moreover, its regulated growth strategy supports an annual dividend-growth guidance of 4-6% through 2027.

The $27.5 billion parent company has ten independent utility operations in Canada, the U.S., and the Caribbean and still growing. Fortis is a Dividend Aristocrat and will become Canada’s second Dividend King, as it prepares to celebrate 50 consecutive years of dividend increases in 2023.

Fortis commits to enhancing shareholder value through the successful execution of its capital plan and strengthening the diversified portfolio of regulated utility businesses. Management will also capitalize on multiple growth opportunities that support clean energy.

Pure-play renewable power platform

Brookfield Renewable Partners beats the broader market by a wide margin year to date at +21.08% versus +1.41%. Also, at $40.98 per share, the dividend offer is a lucrative 4.53%. This $26.3 billion renewable power generator belongs to the Brookfield Asset Management family.

The pure-play renewable power platform of Brookfield Renewable consists of hydroelectric, wind, solar and storage facilities. Besides North America, there are facilities in South America, Europe, and Asia. Management said 2022 was the strongest year for growth, as the company invested ($12 billion) across all major decarbonization asset classes.

Brookfield’s competitive advantage is the highly compelling investment environment for renewables. This green stock should be the top-of-mind choice of ESG (environmental, social, and governance) investors soon.

Stay invested

Please don’t head for the exits when the market is under stress. You can stay invested and hold safe stocks that can survive a downturn.

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 Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Asset Management, Brookfield Renewable Partners, Fortis, TELUS, and Telus International. The Motley Fool has a disclosure policy.

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