As a new investor, I believe you should focus on dividend stocks. Dividend stocks tend to be much less volatile than growth stocks. By focusing on less-volatile stocks, new investors can get used to the daily ups and downs of the stock market without having to stomach too much movement. Additionally, dividend stocks pay shareholders on a regular basis, which could incentivize newer investors to continue nurturing good financial habits.
In this article, I’ll discuss three dividend stocks for beginners. All of these companies have businesses that are easy to understand and are well established in their respective industries.
This is more than a telecom company
Telus (TSX: T) is one of the most well-known companies in Canada. It operates the largest telecom network in the country, providing coverage to 99% of the Canadian population. Despite that impressive status, it’s not Telus’s telecom business that I think investors should focus on. This company has emerged as a bona fide competitor in the telehealth space. As that industry continues to grow, Telus could establish itself as one of the most important companies in Canada.
In terms of its dividend, Telus is listed as a Canadian Dividend Aristocrat. The company has raised its dividend for 17 years, placing it among the Canadian elites in that regard. Investors should note that Telus offers a very attractive forward dividend yield of 4.93%. That gives you excellent bang for your buck, if you’re interested in generating passive income.
Invest in grocery companies
New investors should also focus on Metro (TSX: MRU), or at least companies like it. Groceries are essential in our everyday lives. As such, consumers will likely wait a very long time before cutting costs drastically in this area of their lives. In my opinion, that gives Metro a very stable business.
Another Canadian Dividend Aristocrat, Metro has raised its dividend in each of the past 26 years. For reference, only 11 Canadian companies have managed to maintain a dividend-growth streak of 25 years or longer. It should be noted that Metro’s dividend yield is only 1.57%. However, the stable nature of this company’s business makes it a reasonable candidate for a new investor’s portfolio, in my opinion.
Here’s a good stock for the future
It’s hard to deny that renewable energy is continuing to grow in penetration around the world. Because of that, I believe companies like Brookfield Renewable (TSX: BEP.UN) could continue to grow at an impressive rate.
For those that haven’t heard of this company before, Brookfield Renewable is one of the largest producers of renewable utilities in the world. It operates a diversified portfolio of assets capable of generating 25 gigawatts (GW) of power. Brookfield Renewable also has another 110 GW of generation capacity along various stages of development. The completion of those construction projects would further cement this company as a leader in its industry.
Brookfield Renewable has managed to increase its dividend in each of the past 11 years, at a rate of 6%. This company differs from the others discussed in this article, because the stock has also exemplified outstanding growth. Since inception, it has generated an average annual return of 15%.
