Along with expert management, another way of adding value and stability to your portfolio is to add income stocks. With strong earnings, falling inflation and reasonable valuations relative to their U.S. counterparts, Canadian dividend stocks look attractive.
Given potential upcoming economic challenges, the stock market anticipates future trends. When evidence shows slowing inflation, rising unemployment and falling GDP, stocks are likely to rise quickly. The expected decline in interest rates and the shift from fixed income to equities will contribute to this recovery.
In such a scenario, these two stocks can be your ticket for a once-in-a-decade chance to get rich.
Fortis
Fortis (TSX:FTS), a leading player in the regulated electricity and gas sector in North America, has demonstrated robust financial performance in 2022 with revenues reaching $11 billion and total assets of $65 billion by March 31, 2023. The company has shown impressive stock market gains that increased by 27%. It has outperformed the market ex-dividend returns in the past five years.
In particular, Fortis maintained steady annual growth of 4.8% in both earnings per share and share price, underscoring continued investor confidence. On September 19, 2023, Fortis announced a monumental five-year $25 billion capital plan, the largest in its history, supported by the Inflation Reduction Act of 2022.
The plan includes significant investments in regional transmission projects and transition support for Tucson Electric Power. from coal in Arizona.
Additionally, the company raised its dividend by 4.4% to $0.59 on December 1, resulting in an industry-standard dividend yield of 4.3%.
Fortis has a strong dividend payout record and has steadily increased its distribution by 6.6% annually over the past decade. With a projected 13.7% earnings per share growth in the coming year, Fortis remains a valuable long-term investment option as its consistent growth is in line with shareholder expectations.
Restaurant Brands
Restaurant Brands International (TSX:QSR) reported lower-than-expected quarterly revenue due to disappointing same-store sales growth at Burger King. The company’s net income attributable to shareholders was $252 million, down from $360 million a year earlier. Excluding items, the company earned 90 cents per share. Net sales rose 6.4% to $1.84 billion, with Tim Hortons’s performance impacted by unfavourable exchange rates.
Burger King’s same-store sales rose 7.2%, missing estimates, primarily due to income tax expenses and other non-cash expenses. Despite challenges caused by the war in Ukraine and COVID-19, the company’s revenue rose to $1.83 billion from $1.72 billion a year earlier. Restaurant Brands International also announced plans to modify its senior secured credit facilities to extend maturities and make other changes. These factors should lead to increased stability moving forward.
In short, folks need to eat, and Restaurant Brands provides the sort of value that consumers may require if we hit a rough patch. For those looking for a defensive income stock to buy, this is a top pick of mine right now.
