In my opinion, every investor should hold dividend stocks in their portfolio. This is because dividend stocks offer two very important benefits. First, they can help you generate a source of passive income. Over time, that could help investors supplement or even replace their primary source of income. Second, dividend stocks tend to be much more stable than growth stocks. That could help provide stability to your portfolio during periods of economic uncertainty. In this article, I discuss three dividend stocks every Canadian investor should own.
This is one of the best dividend stocks around
When it comes to dividend stocks, very few should be as attractive as Fortis (TSX:FTS). For those that are unfamiliar, Fortis provides regulated gas and electric utilities to more than 3 million customers across Canada, the United States, and the Caribbean. In 2022, the company reported $11 billion in revenue, solidifying its spot among the largest utility companies in the country.
Fortis is very well known for its long history of raising its dividend. In fact, its 49-year dividend growth streak is the second longest active streak in Canada. Because of the nature of Fortis’ business, the company is able to plan for dividend raises much ahead of time. The company has already announced its plans to continue raising its dividend at a rate of 4% to 6% through to 2027.
A very reliable stock for your portfolio
Canadian National Railway (TSX:CNR) is another excellent stock to consider holding in your portfolio today. This is one of the largest railway companies in North America. Canadian National operates a rail network that spans from British Columbia to Nova Scotia. All considered, Canadian National operates about 33,000 km of track. That wide reach has helped Canadian National become one of the most recognizable names in the country.
Canadian National is another stock that has done a very good job of raising its dividend over time. In fact, this is one of only 11 TSX-listed stocks that currently hold a dividend-growth streak of 26 years or longer. In my opinion, what’s most impressive about this company is how fast it has grown its dividend over that period. Since 1996, Canadian National’s dividend has grown at a compound annual growth rate of nearly 16%. That has helped its shareholders stay ahead of inflation.
A stock I’d consider adding to my portfolio
Finally, investors should consider holding grocery stocks in their portfolio. This is because groceries are essential for humans to survive. That means, even during periods of economic uncertainty, grocery companies should continue to see steady business. In my opinion, Metro (TSX:MRU) is the most appealing grocery stock in Canada.
Like the two stocks discussed previously, Metro has done an excellent job of raising its dividend over time. In fact, the company holds a 28-year dividend-growth streak. Over that period, shareholders have seen their dividend grow at a compound annual growth rate of 17.5%. With a payout ratio of only 30%, I think Metro could continue to comfortably raise its dividend for years to come. This isn’t a stock I currently hold in my portfolio, but that could very well change in the future.
