Many investors seek passive income streams to enhance their overall portfolio returns. Indeed, roughly half of the overall return of the stock market over the past century has come in the form of dividends. Thus, investors would be remiss to ignore the opportunities and upside dividend stocks provide.
Of course, selecting the best dividend stocks that also have prime growth prospects and offer fundamental stability is the goal. In this article, I’m going to highlight three stocks I think fit this bill.
So, without further ado, let’s dive in.
Restaurant Brands
Restaurant Brands (TSX:QSR) is a popular quick-service fast-food restaurant operating in Canada, the US, and other international locations. The company serves fast food to customers worldwide through four major brands. These are Burger King, Popeyes Louisiana’s Kitchen, Tim Hortons, and Firehouse Subs.
A dominant player in the Canadian stock market, Restaurant Brands has become a popular dividend stock for long-term investors, with a current yield of more than 3%. That said, Restaurant Brands has seen its yield decline in recent months, as its stock price has shot higher. Now trading near an all-time high, investors may wonder why this is a dividend stock worth considering.
For one, the company has increased its distribution for five years straight. With fundamental top- and bottom-line growth, I expect its dividend to continue to rise in line with its earnings. Thus, for those betting on the longevity of this sector, Restaurant Brands remains a top pick of mine right now.
Fortis
In terms of dividend growth, no stock really comes close to Fortis (TSX:FTS). Indeed, over the past 50 years, this leading electric and gas utility company hasn’t missed an opportunity to raise its dividend. Thus, for those seeking long-term dividend growth, Fortis remains a top pick of mine.
The company’s status as a Dividend Aristocrat is unlikely to change, given the fact this company has weathered multiple recessions over its history and has remained steadfast in its approach to returning capital to shareholders.
In a declining interest rate environment, I think utility stocks like Fortis should outperform. Accordingly, I’m considering adding this stock here, and holding over a five-plus year timeframe.
Alimentation Couché-Tard
Established in 1984, Alimentation Couche-Tard (TSX:ATD) licenses and runs gas stations and convenience stores in North America, Europe and Asia. The convenience stores under this company sell grocery items, candies, snacks, beers, tobacco and non-tobacco products, fresh food products, beverages, and much more.
The pandemic provided a clear headwind for Couche-Tard, which also ended up being a buying opportunity for long-term investors. Now hovering around its all-time high, Couche-Tard still provides investors with a reasonable dividend yield of 0.8%. While this low yield is mostly attributable to the stock’s rise, I think Couche-Tard should be in a position to hike its dividend moving forward. This is a stock I’ve been bullish on for a long time, and it’s been a solid pick.
This company closed the first quarter of 2024 with more than 14,000 retail stores across the US, Canada, Europe, and other regions. Analysts anticipate a bullish trend on the horizon for Alimentation Couche-Tard, and I see no reason why this stock won’t continue its march higher.
