The Canadian stock market is filled with opportunities for investors who seek passive income and potential capital appreciation. The TSX includes some high-dividend-paying sectors such as energy, banking, metal mining, and utilities. Many companies in these sectors often offer sustainable and increasing dividends that can help their shareholders create a steady income stream along with the potential for long-term growth.
While many fundamentally strong dividend stocks haven’t seen much appreciation in 2023 so far due to the ongoing macroeconomic challenges, it could be the right time to buy such stocks to hold for the long term, as these temporary challenges might not majorly affect their long-term growth outlook.
In this article, I’ll talk about two such Canadian dividend stocks that you can buy now and hold as long as you want to boost your wealth.
Manulife Financial stock
Manulife Financial (TSX:MFC) is the first Canadian dividend stock I find worth considering in the second half of 2023. This diverse financial services giant currently has a market cap of $48.4 billion, as its stock trades at $26.32 per share after advancing by 9.5% on a year-to-date basis. At this market price, MFC stock has a decent 5.5% annualized dividend yield and distributes its dividend payouts every quarter.
Rapidly rising interest rates and high stock market volatility have taken a toll on the banking sector in the last year. However, Manulife Financial’s well-diversified portfolio of financial services gives it the ability to continue growing, even in a difficult market environment.
While Manulife is yet to announce its second-quarter results (due on August 9), it posted a 2.1% year-over-year increase in its adjusted earnings in the first quarter of 2023 with the help of continued strength in its North American insurance businesses.
As its Asian business unit continues to gradually rebound from global pandemic-related challenges, you can expect its earnings growth to improve further in the coming quarters, making this dividend stock look cheap to buy now and hold for years to come.
Magna International stock
Magna International (TSX:MG) is another fundamentally strong Canadian dividend stock you may want to buy right now. Despite starting 2023 on a weak note by sliding nearly 5% in the first quarter, this Aurora-headquartered auto parts and mobility firm’s share prices have strengthened in the last few months. With this, MG stock currently trades with about 11% year-to-date gains at $84.36 per share and a market cap of $24.2 billion.
Its annual dividend yield of 2.9% might not look too impressive at first. But Magna’s solid track record of dividend growth still makes it worth considering. To give you an idea, its dividend per share rose 64% in five years between 2017 and 2022.
Coronavirus-driven operational challenges badly affected global automotive production and demand, indirectly affecting Magna’s business growth last year. This is one of the key reasons why its share prices dived by about 26% in 2022. Nonetheless, the faster-than-expected recovery in global automotive demand this year is likely to have a positive impact on its financial growth trends, which could help this dividend stock rally in the coming quarters.
It’s important to note that, however, MG stock may remain volatile in the coming days, as it’s preparing to announce its second-quarter results later this week on August 4.