Finding that perfect dividend stock to buy early on can help investors reap the rewards of decades of reinvested dividends. But what stock should investors turn to for that expected growth? This stock, in particular, is one of the smartest dividend stocks to buy right now.
Oh, and perhaps best of all, you can kickstart that long-term growth in 2023 with as little as $1,000.
Investing early matters…a lot!
One of the biggest pointers that new investors should note is that investing early on makes a difference. In fact, it can make the difference between retiring with a well-funded nest egg or having to work well into your golden years and still not having enough.
This is thanks to the long-term impact of reinvested dividends, which allow your investment to grow on autopilot. It’s also worth noting that some investments provide an annual or better uptick to those dividends, which provides further growth.
So then, what stock can investors turn to as one of the smartest dividend stocks on the market right now?
That would be Fortis (TSX:FTS), and here’s a closer look at why you should buy this stock to hold for a decade or more.
Meet Fortis
For those that are unfamiliar with Fortis, the company is one of the largest utilities on the continent. Fortis has operations across parts of Canada, the U.S., and the Caribbean. Those operations are split across 10 operating regions and include generating and distribution assets.
One of the main advantages of utility stocks stems from the reliable business model that they follow. In short, utilities are bound by long-term regulated contracts to provide a service, for which they are compensated.
In other words, as long as the utility continues to provide that contracted service, it generates a reliable and recurring revenue stream. That reliable revenue stream allows Fortis to provide a juicy dividend to investors and invest in growth.
The defensive appeal of that business model alone makes Fortis one of the smartest dividend stocks to buy right now, but there are still a few more noteworthy points to mention.
Critics of utility investments often note that utilities are boring investments that lack the ability or incentive to invest in growth. Fortunately, Fortis dispels that stereotype.
Fortis has always taken an aggressive stance on growth. The company has executed a series of progressively larger acquisitions over the years, allowing it to become the behemoth it is today.
In recent years, that growth has shifted internally, with Fortis investing in its existing infrastructure. This includes both upgrading facilities and transitioning over to renewables.
Fortis is one of the smartest dividend stocks to buy right now
Fortis wouldn’t be one of the smartest dividend stocks to buy if it didn’t offer an appealing dividend. As of the time of writing, the yield on Fortis’ quarterly dividend works out to a respectable 3.79%. That’s not the highest yield on the market right now, but it is stable, and it is growing.
In fact, Fortis has provided an annual bump to that dividend for an incredible 49 consecutive years. The company is on track to provide its 50th consecutive increase later this year, at which point Fortis will become the second Dividend King in Canada.
And perhaps best of all, Fortis isn’t stopping there. The company remains committed to providing annual increases of up to 6% over the next few years.
In other words, Fortis is one of the smartest dividend stocks to buy right now and forget about for a decade or more. Prospective investors should keep in mind that you don’t need thousands to kick off that growth journey.
As of the time of writing, investors with $1,000 to start can purchase just over 16 shares of Fortis.
That’s not enough to retire on, but it can help kick off a long-term well-diversified portfolio that will see growth over the longer term
