Risk-averse investors love holding dividend stocks that provide them with stable income each and every quarter. Indeed, the ability to create passive-income streams while benefiting from capital-appreciation potential is lucrative.
Sure, fixed-income alternatives finally exist. Investors can go out and buy bonds yielding 4% or more and sit tight.
That said, these dividend stocks provide the right mix of income and growth I think are worth considering. Here are three stocks I can’t wait to buy this year on any dips.
Top dividend stocks to buy: Fortis
Fortis (TSX: FTS) is an international provider of energy utilities. With a dividend yield of 3.8% and an annualized distribution of $2.26 per share, there’s a lot to like about this stock at face value. Additionally, this company’s payout ratio at less than 80% is attractive relative to its peers and historical averages.
That said, the real reason I’m excited about Fortis stock has less to do with its current dividend yield. Rather, the company’s long-term, dividend-growth trajectory is what I think is worth buying into. The company has raised its distribution for nearly five decades straight — among the longest streaks on the TSX. Thus, for those seeking dividend growth, this is a top option.
To top it off, Stuart Lochray, the company’s senior vice president, recently bought a significant chunk of stock in February. For investors looking at stocks with big insider buying, do as the insiders do with FTS stock.
Enbridge
Enbridge (TSX: ENB) is a well-known energy infrastructure company, with one of the biggest energy pipeline networks in North America. The company’s dividend yield currently sits at 6.6%, among the highest-yielding stocks on this list.
Accordingly, for investors seeking dividend yield today, Enbridge is an intriguing stock to consider. The company’s payout ratio is high, and its debt levels are also elevated, alongside a price-to-earnings multiple of more than 40 times. That may dissuade many investors from considering this stock on a fundamentals basis.
However, the company’s long-term capacity contracts with its counterparties are rock solid. Given the recent strength of the energy sector, this is one low-beta way to play the space I think is worth considering. As a long-term holding, this is a stock I think is worth buying on further downside from here.
Restaurant Brands
Perhaps my favourite stock of all on the TSX is Restaurant Brands (TSX: QSR). I like this company for its mix of growth, income and value, but its dividend isn’t too shabby. At a yield of 3.2%, QSR stock is among the best dividend stocks to buy right now, at least in my view.
This fast-food giant has among the most defensive business models of any stock on the TSX. For investors worried about a recession, there’s plenty to like about the positioning of a fast-food company. Consumers will trade down when dining out, leading to potential revenue and earnings growth in difficult times.
In the case the economy improves, even better for Restaurant Brands’s growth ambitions. In either case, this is a dividend stock I think is worth a buy at these levels, and I’d be backing up the truck if we see a marked decline, as we did in 2020.
