The Allure of Passive Income: Exploring Canada’s Top Dividend Stocks

These dividend stocks provide stellar passive income, with returns that are pretty much guaranteed! So hop in before this deal is gone.

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Passive income continues to be top of mind for investors in Canada today. The market is certainly recovering, and although it opened lower on Novwmber 27, at the time of writing, it’s still set to be a blow-out month for the market.

Yet this also means there is less time to snatch up dividend stocks for major income. There are still quite a few dividend stocks that can provide major income for investors through dividends alone. However, they could also spell out huge returns if you pick them up today. So let’s look at some strong options.


BCE (TSX:BCE) certainly looks like a great long-time purchase for investors seeking out passive income. BCE stock remains as Canada’s top telecommunications provider, but has come under pressure in recent months. This comes from a few sources.

First, there’s the potential merger of Rogers and Shaw, which could see some clients choose this merger over BCE stock. Then there’s been drama with the Canadian Radio and Television Commission (CRTC). The CRTC stated that for fair competition, larger telecommunications companies need to provide access to their wireline services. This has led BCE stock to cut back on its goals, reaching 8.3 million customers by 2025 instead of nine million.

Even so, this has weighed on the stock price more than it should. BCE stock remains a strong investment with a major dividend to consider. One that’s grown year after year. So now, you can pick up the dividend stock with a 7.2% yield and shares down 16% in the last year.

Canadian Utilities

Canadian Utilities (TSX:CU) is another one of the dividend stocks to consider while it’s down, but not out. The company soared during the early days of the economic downturn. Since then, shares dropped as Canadians looked to take out returns. Now is, therefore, the best time to get back in.

That’s because CU stock is one of just two Dividend Kings on the TSX today. The company has raised its dividend each year for the last 50 years! This has created a steady stream of passive income that investors can look forward to.

Yet right now, fair value and foreign exchange have led to lower earnings for the stock. These are not permanent situations, and due to improve quite soon as the market also improves. So instead you can grab a high 5.84% dividend yield, far higher than its five-year average of 4.89%!

A high-yield ETF

Another option if you’re worried about dividend stocks, consider a bunch of them. That’s what you can achieve by investing in an exchange-traded fund (ETF). This is also an excellent option during this market volatility. While it’s improving, it may not be a straight shot upwards.

That’s why the Vanguard FTSE Canadian High Dividend Yield Index ETF (TSX:VDY) is a great option. The company focuses on the performance of the Financial Times Stock Exchange (FTSE), and the high yield dividend stocks within it.

Right now, it offers a 4.81% dividend yield, with shares down just 4.5% in the last year. So again, you should achieve some strong returns as the stocks within the ETF recover. Further, you’ll get some solid passive income. All while allowing a management team to look after your investments! So consider these high-yielding dividend stocks and watch the passive income flood in.

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 Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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