There are several ways to achieve financial freedom through stock market investing. Creating a well-balanced portfolio offering growth and significant passive income is an excellent approach to build lasting wealth. By identifying and investing in the top stocks for this purpose, you can turn your self-directed portfolio into another revenue stream.
Stocks that pay a portion of profits to investors through dividends entail a lower degree of capital risk than growth stocks. The biggest reason for lower risk with dividend stocks is the possibility of quarterly or monthly dividend income that can line your account balance with extra cash.
Additionally, investing in reliable dividend stocks means you can keep getting returns through dividends even when share prices fall in harsh market environments. Canadian Dividend Aristocrats are TSX dividend stocks with a track record of increasing shareholder dividends for several years in a row.
These TSX stocks are some of the best assets to invest in to generate a reliable passive-income stream in your investment portfolio.
Today, I will discuss two excellent picks among Canadian Dividend Aristocrats for income investors.
Parkland
Parkland (TSX: PKI) is a rapidly growing independent fuel and petroleum supplier with a $5.98 billion market capitalization. Headquartered in Calgary, Parkland owns and operates several gas stations under different banners. It is also a retailer boasting the second-largest convenience store chain in Canada. As of this writing, Parkland stock trades for $34.08 per share and boasts a 3.99% dividend yield.
Up by 17.60% year to date, Parkland stock’s performance reflects its steady performance in the first quarter (Q1) of fiscal 2023. Parkland’s operating revenues increased by 7.2% year over year, and its net earnings grew by a massive 40% in the same period.
The company’s management aims to reduce leverage, increase shareholder returns, and increase its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to $2 billion by 2025.
Having increased payouts for the last 10 years, it pays its shareholders their dividends at a monthly schedule.
Fortis
Fortis (TSX: FTS) is a $28.21 billion market capitalization utility holdings company that is the epitome of reliable dividend stocks. A Canadian Dividend Aristocrat of the highest order, Fortis stock has increased its payouts to shareholders for the last 49 years. As of this writing, Fortis stock trades for $58.26 per share and boasts a 3.888% dividend yield.
Utility companies like Fortis have a reliable income stream. Relying primarily on long-term contracted assets in a highly rate-regulated environment, Fortis generates stable and predictable revenue. Due to its stable revenue stream, long-term contracts, and stellar dividend track record, it is reputably a great income-investor pick to consider.
Foolish takeaway
If you are looking for smart TSX stocks to buy that can consistently generate passive income for you, Canadian Dividend Aristocrats like Parkland stock and Fortis stock represent some of the best picks in the market today. Consider adding these two stocks to your self-directed investment portfolio for dividend income that can keep growing for decades.
