Lining Your Nest Egg? These Canadian Dividend Stocks Can Help

Are you looking for dividend stocks that can line your nest egg?

| More on:
A golden egg in a nest

Image source: Getty Images.

If you’re at the stage of your investment journey where it’s time to start thinking about lining your nest egg, you should seriously consider investing in dividend stocks. Simply put, these are companies that pay investors a portion of their earnings simply for holding shares in their company. By accumulating many shares of outstanding dividend stocks, investors could possibly see a massive recurring payment in their portfolios.

In this article, I’ll discuss three top Canadian dividend stocks that can help you in retirement.

This is the best dividend stock around

When it comes to dividend stocks, Fortis (TSX:FTS) is always a company that investors should be thinking about. Serving more than three million customers, this is one of the largest utility companies in North America. Because of the nature of its business, Fortis can take advantage of stable and recurring revenue and turn that into an outstanding dividend. In fact, Fortis shareholders have been treated to one of the most impressive dividend track records in Canada.

In each of the past 49 years, Fortis has managed to increase its dividend distribution. That represents the second-longest active dividend-growth streak in the country. Fortis has already announced its plans to continue increasing its dividend through to at least 2027 at a rate of 4-6%. If you’re looking for a stock that could help you live a comfortable retirement, then Fortis is certainly a stock worth considering.

Don’t forget about the Canadian banks

Investors should also consider buying shares in the Canadian banks. These companies, especially the ones at the top of the industry, have managed to establish very stable businesses. The Big Five, as the leaders in the Canadian banking industry, are known to maintain very formidable moats, which help them stay ahead of their competitors. Of that group, Bank of Nova Scotia (TSX:BNS) is the company I find the most attractive.

Bank of Nova Scotia has been paying shareholders a dividend since July 1, 1833. Since then, it has never missed a payment. That represents 190 years of continued dividend distributions. Although the company doesn’t boast the same kind of dividend-growth streak as Fortis, I think its long history of reliably paying shareholders is something that shouldn’t be overlooked.

One dividend stock I plan on adding to my portfolio

Finally, investors should consider adding Canadian National Railway (TSX:CNR) to their portfolios. I know I have been. This is one of the largest railway companies in North America, operating nearly 33,000 km of track. Its rail network stretches from British Columbia to Nova Scotia and as far south as Louisiana.

Like Fortis, Canadian National is impressive because of its outstanding dividend-growth streak. At 26 years, it’s only one of 11 TSX-listed stocks to currently maintain a dividend-growth streak of that length or longer. With a dividend-payout ratio of about 38% on the books, Canadian National appears to still have a lot of room to continue growing that dividend in the future.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Jed Lloren has positions in Bank Of Nova Scotia and Fortis. The Motley Fool recommends Bank Of Nova Scotia, Canadian National Railway, and Fortis. The Motley Fool has a disclosure policy.

More on Dividend Stocks

A close up image of Canadian $20 Dollar bills
Dividend Stocks

How Much Cash Do You Need to Quit Work and Live Off Dividend Income

Toronto-Dominion Bank (TSX:TD) pays a lot of dividend income. Can you live off of it in retirement?

Read more »

An analyst uses a computer and dashboard for data business analysis and Data Management System with KPI and metrics connected to the database for technology finance, operations, sales, marketing, and artificial intelligence.
Dividend Stocks

Invest $10,000 in This Dividend Stock for $1,398.40 in Passive Income 

This dividend stock offers a whopping 11.9% dividend yield right now, with returns that should fly high for this cyclical…

Read more »

Person holds banknotes of Canadian dollars
Dividend Stocks

This 6.1 Percent Dividend Stock Is My Pick for Instant Income

Here’s what makes Transcontinental one of my top dividend stock picks right now for instant income.

Read more »

Pile of Canadian dollar bills in various denominations
Dividend Stocks

For a Shot at $5,000/Year in Passive Income, Buy 1,000 Shares of This TSX Stock

Do you know you can build passive income with TSX stocks? A $22,000 investment can give you a shot at…

Read more »

Paper Canadian currency of various denominations
Dividend Stocks

Beat the TSX With This Cash-Gushing Dividend Stock

A new Canoe EIT Income Fund (TSX:EIT.UN) investment could earn almost 9% yield annually, and the monthly dividend stock has…

Read more »

RRSP (Registered Retirement Savings Plan) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

RRSP Wealth: 2 Great Dividend Stocks to Own for Total Returns

Dividend stocks like Fortis Inc (TSX:FTS) can be great additions to a well-diversified portfolio.

Read more »

edit Sale sign, value, discount
Dividend Stocks

3 Cheap Stocks to Add to Your TFSA Before They Get Expensive

The stock market has some lucrative TFSA stocks trading at multi-year lows. Now is a good time to buy these…

Read more »

Hour glass and calendar concept for time slipping away for important appointment date, schedule and deadline
Dividend Stocks

How to Build a Bulletproof Monthly Passive-Income Portfolio With Just $10,000

Here’s how to build a diversified portfolio with dividend stocks that, as a group, pay out in every month of…

Read more »