Dividend stocks can be amazing to hold in your portfolio for two reasons. First, they tend to be a lot more stable than growth stocks. This is because dividend stocks tend to be well-established companies that have already dealt with many of the same kinds of questions that may derail a company in its high growth stage. By holding many dividend stocks in their portfolio, investors could add stability to their accounts during periods of economic uncertainty.
The second benefit that comes with holding dividend stocks in a portfolio is that they pay investors on a recurring basis simply for holding shares in the company. If investors were to accumulate a large number of shares across many dividend stocks, then they could be looking at a very formidable stream of passive income. That could help you live a very comfortable retirement.
In this article, I’ll discuss two of the best dividend stocks to buy in Canada for July 2023.
This company is bigger than you think
Alimentation Couche-Tard (TSX:ATD) is the first dividend stock that investors should consider buying today. For those that aren’t familiar, this company operates convenience stores. If the name doesn’t sound familiar to you, then you may be more familiar with some of the other banners that Alimentation Couche-Tard operates under. This includes Mac’s, Winks, Circle K, On the Run, Daisy Mart, and many more. All considered, Alimentation Couche-Tard operates nearly 14,500 locations across 24 countries and territories.
A Canadian Dividend Aristocrat, Alimentation Couche-Tard has managed to grow its dividend 10-fold over the past decade. That represents a compound annual growth rate (CAGR) of about 27%. If you consider that the long-term average inflation rate is about 2%, then it’s clear that Alimentation Couche-Tard shareholders have been able to stay much ahead of that. With a dividend-payout ratio of about 12%, this company has tons of room to continue raising its dividend in the future.
One of the most impressive dividends in Canada
goeasy (TSX:GSY) isn’t a stock that gets a lot of praise from investors; however, I think it should. This is one of the best dividend stocks in the country, and I’ll tell you why in a second. If you’re unfamiliar with goeasy, you should know that it operates two distinct business segments. This includes easyfinancial and easyhome. The former provides high-interest loans to subprime borrowers, and the latter sells furniture and other home goods on a rent-to-own basis.
In my opinion, goeasy may have one of the most impressive dividend-growth records in the country. In 2014, the company offered investors a quarterly dividend of $0.085 per share. Today, goeasy stock comes with a quarterly dividend of $0.96 per share. That represents a CAGR of nearly 31% over the past nine years. Very few companies can compete with that kind of dividend growth. Like Alimentation Couche-Tard, goeasy maintains a low dividend-payout ratio (37%), which gives it lots of room to continue growing its distribution over the coming years.