There are many advantages offered by TSX dividend stocks, especially in this environment, which is why dividend investing is so popular among Canadians.
Dividend stocks offer passive income today, as well as investors the potential for capital gains down the road. Plus, these stocks are often less risky than non-dividend-paying companies because in order to pay a dividend, businesses need to be well-established and consistently profitable.
Furthermore, when the market struggles to gain value for prolonged periods, dividend payments often become some of the only returns you can earn until the market recovers.
And earning cash now, at a time when many stocks trade cheaply, is ideal, as it gives you the chance to reinvest in the market while many top-notch stocks trade at compelling discounts.
So with that in mind, if you’re looking for some of the top TSX dividend stocks that offer significant yields in this environment, here are three of the best to consider in May 2023.
This real estate stock is ideal for passive income seekers
Real estate is one of the best industries to invest in if you’re a dividend investor, especially considering many Canadian REITs are highly defensive. And because they constantly earn tons of cash flow, they are always returning cash to investors.
And while there are numerous dividend stocks in the real estate sector, if you’re looking for a high-quality business that offers a lucrative yield, CT REIT (TSX:CRT.UN) is one of the best to consider.
CT REIT is a unique investment because Canadian Tire owns a majority of its units. It’s also the REIT’s largest tenant, accounting for roughly 90% of revenue. Therefore, as long as Canadian Tire continues to be a reliable company and performs well, which it’s done consistently, then CT REIT should continue to offer one of the best yields in the real estate sector.
Plus, in addition to the fact that CT REIT’s current yield is roughly 5.6%, it also constantly increases its distribution each year, making it a top dividend growth stock.
Therefore, if you’re looking to buy top TSX dividend stocks in May 2023, CT REIT is one of the best to consider, especially now when you can buy it at a discount.
This energy stock offers one of the best dividends on the TSX
In addition to real estate, energy is another industry where there are plenty of high-quality dividend stocks to choose from. And considering that Freehold Royalties (TSX:FRU) is a stock that’s predominantly for passive income seekers, it’s one of the best dividend stocks to buy in May 2023.
Freehold is an exceptional dividend stock because the company is constantly earning tons of cash flow, yet it has minimal expenses itself.
The stock simply owns land that other energy companies use to produce oil and gas. This is a straightforward business model and one that has fewer risks than many other stocks in the energy sector.
Of course, commodity prices will always have an effect on Freehold’s business, as they do on almost any energy stock. Aside from that, though, Freehold is a relatively low-risk stock that pays an attractive and, more importantly, safe dividend every single month.
Furthermore, with Freehold’s stock selling off slightly over the last few months, not only can you buy it at a discount today, but its dividend yield has also increased and now sits at roughly 7.9%, making it one of the top dividend stocks to buy in May 2023.
This royalty stock is one of the best TSX stocks for dividend investors
Similar to Freehold, another high-quality TSX dividend stock to buy now is Pizza Pizza Royalty (TSX:PZA).
While it’s clearly not an energy company, it’s another lower-risk royalty business. So instead of having exposure to the ownership of Pizza Pizza restaurants, the stock instead collects a royalty from all the sales done at these locations across the country.
This allows Pizza Pizza to have minimal expenses and constantly earn tons of cash flow, which leads to an attractive and highly predictable dividend payment each month.
Sales don’t tend to fluctuate very much from quarter to quarter, making Pizza Pizza and its 6.3% yield a great choice for investors looking to buy a top TSX dividend stock in today’s market environment.
