Dividend stocks should be held by every investor, in my opinion. There are two major benefits in holding dividend stocks in your portfolio. First, it allows you to generate a source of passive income. Over time, as you continue to add money to these positions, that passive income could grow to become very significant. The second benefit in holding dividend stocks is that they tend to be less volatile when compared to growth stocks. In this article, I’ll discuss three top dividend stocks to buy today.
Start with one of the best dividend stocks around
When it comes to dividend stocks, Fortis (TSX:FTS) should always stand out as a potential candidate for your portfolio. This company provides regulated gas and electric utilities to more than three million customers across North America. A massive company, Fortis reported $11 billion in revenue in 2022. Utility companies tend to be popular dividend stocks because their business models allow them to plan for dividend distributions much ahead of the pay date.
However, compared to other utility companies, Fortis stands out as a dividend beast. It holds a 49-year dividend-growth streak, which gives it the second-longest streak in Canada. Fortis has already announced its plans to continue growing its dividend at a rate of 4-6% through to 2027. If you’re looking for one dividend stock to buy today, I think Fortis should be put up for consideration.
This massive company deserves a spot in your portfolio
The second dividend stock that investors should take a look at today is Canadian National Railway (TSX:CNR). This is one of the largest railway companies in North America. It operates nearly 33,000 km of track which spans from British Columbia to Nova Scotia. Because of its large reach, Canadian National has managed to establish itself as one of the most recognizable companies in Canada.
This company is notable for its 26-year dividend-growth streak. It should be noted that only 11 TSX-listed companies have managed to increase their dividends for 25 years or longer. That places Canadian National among the elite in that regard. Also of note, over that period, Canadian National’s dividend has grown at a compound annual growth rate of more than 15%. That helps investors stay ahead of inflation.
Paying shareholders for nearly 200 years
Finally, you should consider investing in the Canadian banks. Within that industry, investors have a plethora of excellent options available to them. Whoever, if I could only choose one bank to invest in today, it would be Bank of Nova Scotia (TSX:BNS). This company ranks in the top five among Canadian banks in terms of revenue, assets under management, and market cap.
Bank of Nova Scotia has been paying shareholders a dividend since July 1, 1833. Since then, the company has never missed a dividend payment. That represents 190 years of continued dividend distributions. Although the company doesn’t boast a dividend-growth streak as impressive as the previous two stocks discussed here, Bank of Nova Scotia’s long history of distributing a dividend of some sort should be enough for it to earn a spot in your portfolio. Today, the stock offers investors a forward dividend yield of 6.25%.
