Contrary to what some new investors may believe, building out a well-diversified portfolio isn’t as hard as it seems. In fact, investors that start early and invest in the right stocks can generate a juicy passive income for decades. Fortunately, the market provides some stellar Canadian dividend machines to help accomplish that goal.
Here’s a look at a handful of Canadian dividend machines to add to your portfolio.
Set and forget this soon-to-be-king
Utilities are some of the best long-term investments on the market. That label comes thanks to the defensive business models that they adhere to. In short, utilities generate a stable and recurring revenue stream backed by long-term regulated contracts.
That stable revenue stream, which is largely immune to market volatility, allows utilities to pay out handsome dividends and invest in growth.
Investors looking for an outstanding utility stock to consider should take a look at Fortis (TSX:FTS). Apart from being one of the largest utilities on the continent, as of the time of writing, Fortis pays a juicy dividend with a yield of 3.94%.
Fortis also boasts an incredible 49 consecutive years of annual increases to that dividend. The company is also on track for a 50th increase this year, a feat that will make Fortis the second Dividend King in Canada.
That factor alone makes Fortis one of the superb buy-and-forget Canadian dividend machines for any portfolio.
This big bank provides huge income
It would be near impossible to assemble a list of Canadian dividend machines and not mention at least one of Canada’s big banks. And that bank for investors to consider right now is Bank of Montreal (TSX:BMO).
Apart from offering both a stable domestic segment in Canada and a growing business in the U.S. (more on that in a moment), BMO boasts a very juicy dividend.
In fact, BMO is the oldest of the big banks and has paid out a dividend for nearly two centuries without fail. Today that dividend works out to a juicy 4.80%, making it one of the better-paying Canadian dividend machines on the market.
Turning back to growth, BMO has put a focus on expanding into the lucrative U.S. market. Earlier this year, the bank completed the acquisition of California-based Bank of the West. The deal greatly expanded BMO’s presence in the U.S. market to 32 states.
The deal also added hundreds of new branches to BMO’s sprawling U.S. network, along with the 1.8 million customers and billions in deposits.
How about some food for thought?
Some of the best investments are those which provide a necessary function and we interact with daily. These businesses boast a defensive appeal that few companies can match, making them ideal additions to any portfolio.
Grocers are perfect examples of this, and Metro (TSX:MRU) is one of the Canadian dividend machines to add to your portfolio.
For those unfamiliar with Metro, the grocer boasts a network of approximately 975 grocery stores under various banners. Metro’s grocery locations are primarily located in Quebec and Ontario.
The company also operates a network of over 640 drugstores under several banners including Jean Coutu.
As a dividend stock, Metro offers a quarterly payout with a yield of 1.63%. While that’s not the highest yield on the market, it is well-covered, stable, and growing. In fact, Metro has provided an annual uptick to that dividend for over two decades.
In other words, Metro is another superb defensive stock that can provide a growing income to long-term investors.
Buy these Canadian dividend machines
No stock is without risk, and that includes even the most defensive stocks on the market. Fortunately, the Canadian dividend machines mentioned above offer that defensive appeal and a juicy income as well.
In my opinion, one or all of the above should be part of any well-diversified portfolio.
