Canadian Dividend Aristocrats: The Backbone of Reliable Investing

Are you interested in reliable stocks? Consider Canadian Dividend Aristocrats!

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Dividend Aristocrats, these are among some of the most reliable stocks in the market. Depending on what country you’re investing in, a Dividend Aristocrat could mean different things. However, generally, this is a title given to companies that have a history of raising dividend distributions over time. Companies that hold this title have shown that they’re able to continue raising dividends each year, regardless of what the economy looks like.

In Canada, there are three requirements that a stock must meet to be listed as a Dividend Aristocrat. This includes being listed on the TSX, having a market cap of at least $300 million, and maintaining a dividend-growth streak of at least five years.

In this article, I’ll discuss two top Canadian Dividend Aristocrats that I think all investors should own. Holding these stocks will not only give your portfolio a bit of stability in the long run but also provide a stable source of dividend income.

The best dividend stock in Canada

It’s impossible to mention Canadian Dividend Aristocrats and omit Fortis (TSX:FTS). In my opinion, this is the greatest dividend stock in the country. If you’ve never heard of this company, you should know that it provides regulated gas and electrical utilities to more than three million customers. Fortis operates within Canada, the United States, and the Caribbean.

Fortis is known for holding the second-longest active dividend-growth streak in the country (50 years). The company has already announced its plans to continue raising its dividend through to 2028 at a rate of 4-6%. That growth rate is important to note because it indicates that shareholders should be able to stay ahead of the inflation rate while holding this stock in their portfolio. Finally, I should note that Fortis currently offers investors a forward dividend yield of 4.29%, which indicates a solid bang for your buck.

A stock for the future

If you like the utility space for its reliability, then consider another company in that area. Brookfield Renewables (TSX:BEP.UN) is a company that I think investors should really consider holding for the future. As its name suggests, this company operates a portfolio of assets which generate renewable utilities. As of the first quarter (Q1) of 2023, Brookfield Renewable’s portfolio has a generation capacity of 32 gigawatts (GW). The company also has an additional 132 GW of generation capacity along various stages of development.

Brookfield Renewable has grown its dividend for the past 11 years at a compound annual growth rate of 6%. That means that the company has been successful in meeting its distribution growth target of 5-9% on an annual basis. When considering Brookfield Renewable’s stock appreciation as well, shareholders have been treated to an annualized return of 16% since the stock’s listing. Because of the rise in demand in renewable energy, I believe Brookfield Renewable stock could skyrocket in the coming years.

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 Brookfield Renewable Partners and Fortis. The Motley Fool recommends Brookfield Renewable Partners and Fortis. The Motley Fool has a disclosure policy.

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