Many Canadians dream of achieving financial independence. That’s the term given to the ability to live off your investment portfolio, instead of having to rely on an income from your work. One way to achieve that goal is by investing in dividends. By building a source of passive income, investors could theoretically live off their investment portfolio indefinitely.
In this article, I’ll discuss three Canadian dividend stocks that are worth your investment dollars.
This is one of the best Canadian dividend stocks
When it comes to Canadian dividend stocks, Fortis (TSX:FTS) seems to just stand out among the rest. For those that aren’t familiar, Fortis provides regulated gas and electric utilities to more than three million customers across Canada, the United States, and the Caribbean. Because utility companies tend to generate revenue on a recurring basis, Fortis can take advantage of that steady stream of revenue and plan for dividends much ahead of time.
That business model has allowed Fortis to maintain a 49-year dividend-growth streak. That gives the company the second-longest active dividend-growth streak in Canada. Fortis has already announced its plans to continue raising its dividend at a rate of 4-6% through to at least 2027. If you’re looking for a stable dividend company, Fortis should be one of the first stocks you should consider.
This stock has raised its dividend at a fast rate
In addition to looking for stocks that are able to raise dividends, the rate with which dividends are raised should be considered. Canadian National Railway (TSX:CNR) is an excellent stock in that regard. This company operates one of the largest railway networks in North America. Operating nearly 33,000 km of track spanning from British Columbia to Nova Scotia, Canadian National Railway is one of the most recognizable companies in the country.
This stock has managed to increase its dividend in each of the past 26 years. That makes it one of only 11 TSX-listed entities to achieve that feat. What makes the feat even more impressive is the rate with which Canadian National Railway has increased its dividend. Over those 26 years, Canadian National Railway’s dividend has risen at a compound annual growth rate of about 16%. That growth rate has certainly helped investors keep up with inflation over the past two decades.
Nearly two centuries of continued dividend payments
When you struggle to find interesting companies that are able to raise dividends year after year and at a fast rate, then simply look for stocks that have distributed dividends consistently over many years. Bank of Nova Scotia (TSX:BNS) is an excellent example of such a stock. This is a name that should be very familiar to most Canadians because Bank of Nova Scotia is one of the Big Five banks. What separates this company from its peers is its focus on international growth, but that’s a topic for another article.
Investors should be aware that this stock hasn’t missed a dividend payment since it first started distributing a portion of its earnings to shareholders on July 1, 1833. That represents nearly 190 years of continued dividend distributions. If you’re looking for a dividend stock to add to your portfolio, that’s the sort of track record worth noting.