Unlocking Value: The Best Dividend Deals in the Canadian Stock Market

There’s no shortage of great dividend stocks on the Canadian stock market. Here’s a look at two great long-term options that pay handsomely.

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There’s no shortage of great income-producing stocks to buy in the Canadian stock market. And it just so happens that the market volatility we’ve seen over the past year has made some of those stocks trade at a hefty discount.

Here’s a look at some of the best dividend deals for investors looking at buying in the Canadian stock market.

How about a crazy yield with a big growth?

Enbridge (TSX:ENB) is the first stock to look at in the Canadian stock market. The energy infrastructure behemoth is a name that most investors should already be familiar with. That being said, most investors may not realize just how big and diversified Enbridge actually is.

The company is best known for its lucrative pipeline segments. There’s a good reason for that; Enbridge’s crude and natural gas pipelines comprise the largest and most complex pipeline system on the planet. The segment also generates the bulk of the company’s revenue, thanks to the massive amounts hauled on that network.

The company’s pipeline business often leads Enbridge to be stereotyped as an oil-first, fossil fuel-reliant business. And while the pipeline business is huge, Enbridge is diversifying into other areas, such as renewables.

Over the past two decades, Enbridge has invested $8 billion in developing a portfolio of renewable energy assets. Today, that portfolio comprises over 40 facilities located across Europe and North America.

Finally, Enbridge also operates one of the largest gas utility businesses on the continent. This represents yet another defensive revenue generator with massive growth appeal. It also helps to provide Enbridge with its generous dividend.

That dividend works out to a very generous 7.70% yield, handily making it one of the better-paying dividends on the Canadian stock market.

Oh, and let’s not forget the best part. Despite that defensive appeal, growth potential and juicy dividend, there’s one more point to note. Prospective investors can pick up Enbridge at a sweet discount right now. The stock trades down year to date approximately 12%.

Nearly two centuries of dividends … and huge growth potential, too

I would be remiss if I didn’t mention at least one of Canada’s big banks. And there’s a key reason why the big banks are some of the best dividend deals on the Canadian stock market.

Let’s talk about Bank of Montreal (TSX:BMO). BMO is the oldest of the big banks and has been paying out dividends without fail for nearly two centuries. That’s an incredible amount of time, and the yield on that dividend currently works out to a respectable 5.48%.

And that’s not all — like Enbridge, BMO has an established precedent of providing investors with annual bumps to that dividend.

Turning to growth, BMO has huge long-term potential. Earlier this year, the bank completed the acquisition of California-based Bank of the West. The deal significantly opened the U.S. market to BMO, expanding its coverage to 32 states.

The deal also brought with it 1.8 million new customers as well as billions in loans and deposits.

Apart from the obvious growth potential associated with the deal, there’s still another point to note. BMO’s greatly increased presence in the U.S. market provides an element of diversification outside of its core domestic segment in Canada.

And in terms of value, BMO trades at a 12% discount right now, despite that massive appeal.

There’s plenty to consider on the Canadian stock market

No stock, even the most defensive is without some risk. Fortunately, both BMO and Enbridge offer some defensive appeal to offset some of that volatility.

Both stocks also trade at a juicy discount, making them ideal for long-term investors looking for growth and income. And remember that prospective investors not ready to draw on that income just yet can reinvest it until needed.

That makes both of these superb dividend stocks on the Canadian stock market buy-and-forget candidates for any well-diversified portfolio.

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 Demetris Afxentiou has positions in Enbridge. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy.

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