Many investors, particularly those newer to investing, struggle with building a portfolio with Canada’s top dividend stocks. Fortunately, it’s not as hard as it sounds. In fact, the income-generating potential of some of those dividend stocks is off the scale.
Here’s a look at some of those dividend stocks to consider buying now for your portfolio. Even better, many stocks trade at discounted levels right now, causing their yields to swell, further boosting that income-generating potential.
It’s never a bad time to buy Canada’s big banks
I would be remiss if I didn’t mention the income-generating potential of at least one of Canada’s big banks. The banks are some of the best long-term options for investors, which is thanks to their reliable revenue streams, juicy dividends, and international growth potential.
Bank of Montreal (TSX: BMO) is the bank for investors to consider right now. BMO is the oldest of Canada’s big banks and has been paying out dividends without fail for nearly two centuries.
Today, that yield works out to 4.95%, making it an excellent option for investors looking to boost the income-generating potential of their portfolio.
And that’s not all. BMO also offers investors significant long-term growth potential. Earlier this year, BMO completed the acquisition of California-based Bank of the West. In addition to the hundreds of new branches and customers, the deal propelled BMO into its position as one of the largest lenders in the U.S. market.
In fact, as a result of the deal, BMO now has a presence in 32 U.S. state markets.
Prospective investors who are concerned about market volatility should keep in mind that the big banks have historically fared better than their U.S. peers during times of volatility.
In other words, look at this as an opportunity to buy a great long-term bank while it still trades at a discount.
Tap into the renewable energy business
Renewable energy stocks are some of the most lucrative long-term options for investors right now. This is because they combine the reliable business model of traditional utilities with the insatiable demand for renewable energy sources.
Investors looking to bolster their income-generating potential should consider buying TransAlta Renewables (TSX: RNW).
TransAlta operates a growing portfolio of renewable energy facilities located across the U.S., Canada, and Australia. Those facilities include wind, hydro, solar and gas elements, making it a well-diversified option to consider, too.
And unlike its fossil-fuel peers, TransAlta isn’t straddled with massive costs to transition to renewables. This means that the company can invest in growth initiatives and pay out a juicy dividend to investors.
Speaking of dividends, TransAlta’s dividend works out to a very appetizing 8.47% yield, making it one of the best-paying dividends on the market.
And that’s not all. TransAlta pays that dividend out on a monthly basis. This means that investors who drop $30,000 into TransAlta can expect a monthly income of over $200. As always, investors not ready to draw on that income can reinvest it until needed, boosting that income-generating potential further.
Another defensive option that pays generously
Canada’s telecoms represent another option for investors looking to bolster their income-generating potential. And the telecom to consider investing in is Telus (TSX: T).
Telus offers the typical complement of subscription-based offerings. That includes both wireless and internet segments, both of which have grown in importance since the pandemic started, furthering the defensive appeal of the stock.
And unlike its big telecom peers, Telus doesn’t have a media arm. Instead, it opted to invest in digital solutions through its Telus Health and Telus Agriculture offerings. Both cater to unique market segments, and both boast strong growth.
Turning to dividends, Telus offers investors an opportunity to generate a stable (and growing) quarterly dividend. As of the time of writing, that dividend works out to an appetizing 5.71%. Also worth noting is that Telus has provided investors with annual or better bumps to that dividend for well over a decade.
Boost your Income-generating Potential
No investment is without risk, but fortunately, the stocks mentioned above are diversified across different areas of the market and boast some defensive appeal.
In my opinion, one or all of the above stocks would do well as part of a larger, well-diversified portfolio.
