The Canadian stock market turned shaky again in September 2023 after the U.S. Fed, in its recent meeting, apparently showed its willingness to hike interest rates further and projected the rates and inflation to remain elevated longer than earlier expected. These concerns have led to panic selling in the stock market, especially in growth stocks, making investors worried about their investments.
In such difficult economic environments, having some fundamentally strong dividend stocks in your portfolio can be of great help. Most dividend-paying companies with well-established business models keep rewarding their investors with healthy dividends even in tough times.
In this article, I’ll highlight two of the best Canadian dividend stocks you can buy in September 2023 and hold for the long term to expect steady returns on your investments.
Gibson Energy stock
Gibson Energy (TSX: GEI) is a Calgary-headquartered energy infrastructure company that primarily focuses on the storage and processing of crude oil and refined products. It currently has a market cap of $2.8 billion, as its stock trades at $20.09 per share with about 15% year-to-date losses.
These losses in GEI stock could largely be attributed to the slowing global economy that has dimmed the short-term demand outlook for energy products. Despite these external challenges, Gibson Energy’s financial growth trends look impressive. Notably, the company has exceeded Street analysts’ revenue and earnings estimates for the last four consecutive quarters.
Even as lower commodity prices drove the revenue of its marketing segment down in the second quarter of 2023, higher refined product margins and other quality-based opportunities in crude marketing drove its adjusted quarterly earnings up by 54.2% YoY (year over year) to $0.37 per share.
In August, Gibson completed the acquisition of the South Texas Gateway Terminal in an effort to strengthen its cash flow and expand its presence in the crude oil export segment. Such initiatives will likely boost its future growth outlook, making it a great Canadian dividend stock to invest in for the long term.
At the current market price, Gibson Energy offers an impressive 7.6% annualized dividend yield and distributes its dividend payouts every quarter.
Superior Plus stock
Superior Plus (TSX: SPB) is another top Canadian dividend stock you can bet on for the long term. With its headquarters in Toronto, this company primarily focuses on distributing and marketing propane and distillates. After sliding by 5.9% in the ongoing year, its stock currently trades at $10.57 per share with a market cap of $2.6 billion. Just like Gibson Energy, Superior Plus also distributes its dividends every quarter and offers an attractive 6.7% annualized dividend yield at this market price.
Despite a challenging macroeconomic environment, Superior posted a 2% YoY increase in its total revenue in the first half of 2023 to $1.84 billion. More importantly, higher gross profit, foreign currency tailwinds, and gains on derivatives drove its adjusted earnings up by a solid 91% YoY to $0.42 per share in the first half of the year.
Encouraged by its strong financial performance in recent quarters, Superior Plus expects its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) to strengthen significantly, with its pro forma 2023 adjusted EBITDA guidance’s midpoint of $650 million reflecting as 44% YoY improvement.
Besides these positive factors, the company’s consistent focus on the expansion of its North American platform of low-carbon energy distribution makes it a reliable dividend stock to buy in Canada right now.
