Stock market investing is an excellent way for Canadians to achieve their long-term financial goals. There are several ways you can put your money to work in the stock market to do that. Among them, creating a portfolio of dividend stocks could be a great way to create a passive-income stream.
By building a substantial dividend income portfolio, you can boost your retirement income through reliable dividend income.
While the stock market can be incredibly volatile, retirees can rely on the shares of fundamentally strong dividend stocks to continue providing them with returns on their investments.
Companies with resilient business models, plenty of room to grow, and a growing earnings base can fund and grow dividend payouts. Identifying and investing in the right dividend stocks can help you create a strong dividend income portfolio.
To this end, I will discuss two high-quality dividend stocks that can be excellent additions to a self-directed passive-income portfolio.
Fortis
Fortis (TSX:FTS) is a mainstay in the portfolios of many stock market investors, and it makes complete sense why. The $27.87 billion market capitalization utility holdings company is an essential business.
It owns and operates several natural gas and electricity utility businesses throughout Canada, the U.S., Central America, and the Caribbean. While higher interest rates have impacted its performance due to higher borrowing costs, Fortis has a business model resilient enough to overcome challenging market environments.
Fortis generates almost its entire revenue through long-term contracted assets in regulated markets. These two factors ensure predictable and stable cash flows for the utility giant. In turn, Fortis can comfortably fund and grow its shareholder dividends.
A Canadian Dividend Aristocrat, Fortis stock is inching closer to a 50-year dividend-growth streak. With capital programs to expand its earnings base underway, it looks set to continue growing shareholder dividends for years to come. As of this writing, Fortis stock trades for $57.54 per share and boasts a 3.95% dividend yield.
Enbridge
Enbridge (TSX:ENB) is another excellent pick to consider if you want to buy and hold a top dividend stock. The $101.36 billion market capitalization Canadian energy company is a major player in the region.
Boasting an extensive energy pipeline network, it transports crude oil, natural gas, and natural gas liquids throughout Canada and the United States. Responsible for transporting a significant chunk of all the energy products consumed in the U.S., it is essential to the region’s economy.
With continued investments into traditional and renewable energy assets, Enbridge is future-proofing itself for a greener future in the energy industry.
Combined with its ongoing long-term contracts, it also reduces its risks from reduced energy product prices and volumes. It has secured several multi-billion-dollar capital projects that look set to support its payouts and drive more growth in the coming decades.
As of this writing, Enbridge stock trades for $50.10 per share and boasts a juicy 7.09% dividend yield that you can lock into your portfolio today.
Foolish takeaway
The Canadian stock market offers plenty of dividend stocks you can invest in. That said, not every dividend-paying company can be good for a retirement income portfolio. You must understand the importance of betting on fundamentally strong companies that can weather stock market cycles while continuing to pay shareholder dividends through thick and thin.
To this end, Fortis stock and Enbridge stock have a strong reputation among Canadian dividend stocks suitable for such a portfolio.
