The market correction is giving buy-and-hold investors a chance to add great Canadian dividend stocks to their retirement portfolios at cheap prices. Stocks with steady track records of dividend growth tend to also see their share prices rise over the long term.
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BCE
BCE (TSX:BCE) is Canada’s largest communications company with a current market capitalization near $56 billion. The wireless and wireline networks provide Canadian businesses and residential customers with essential mobile and internet services. BCE has the balance sheet strength to make the investments needed to ensure it protects its competitive position while providing state-of-the-art services to its customers. In fact, BCE spent about $5 billion in 2022 on projects that include the 5G mobile network and the expansion of the fibre-to-the-premises initiative.
BCE trades near $61.50 at the time of writing compared to more than $73 at the high last year. Investors can take advantage of the pullback to get a 6.3% dividend yield. BCE typically increases the dividend by about 5% annually.
Fortis
Fortis (TSX:FTS) isn’t as cheap as it was last fall when the stock dipped below $50 per share, but investors should still consider adding Fortis to their dividend portfolios at the current price around $57.50.
Fortis is working through a $22.3 billion capital program that is expected to significantly increase the rate base over the next five years. As a result, management plans to raise the dividend by at least 4% annually through 2027. That’s good guidance in the current era of economic uncertainty.
Fortis gets nearly all of its revenue from regulated assets, including power-generation facilities, electricity transmission networks, and natural gas distribution utilities. These are essential services that businesses and households need regardless of the state of the economy.
Fortis increased the dividend in each of the past 49 years. The current distribution provides a 3.9% annualized yield.
Bank of Montreal
Bank of Montreal (TSX:BMO) paid its first dividend in 1829. Investors have received a distribution every year since that time.
Bank of Montreal started building its American business in the early 1980s. Over the past 40 years, the bank made acquisitions to grow the U.S. operations, including the US$16.3 billion takeover of Bank of the West that occurred in early February this year. The deal added more than 500 branches and gives BMO Harris Bank a strong base in California.
Investors might be concerned that Bank of Montreal overpaid to buy Bank of the West. In the months following the closing of the deal, the share prices of regional banks in the American market have tanked due to high-profile failures of two other California-based banks.
Time will tell, but BMO shareholders should see long-term benefits emerge from the acquisition. In the meantime, investors can take advantage of the dip in the price of BMO stock to pick up a solid 5% dividend yield. BMO trades for close to $116 at the time of writing compared to $136 in February.
The bottom line on top TSX dividend stocks
BCE, Fortis, and Bank of Montreal pay attractive dividends that should continue to grow. If you have some cash to put to work, these stocks deserve to be on your radar.
