Dividend investing for regular investors isn’t only about growing wealth or making a fortune. It’s a strategic approach to meeting long-term financial goals like retirement. However, achieving financial stability in the future depends mainly on stock choices.
The National Bank of Canada (TSX: NA), TELUS (TSX: T), and Fortis (TSX: FTS) don’t pay the highest dividends, but they are safe choices. All three companies are long-term winners for having endured countless economic downturns.
A-rated bank
National Bank was born in 1859 and is presently Canada’s sixth-largest bank. This $34.7 billion lender focuses on the domestic market, with a stronghold in Quebec. Outside Canada, the A-rated bank owns 90% of ABA Bank, one of Cambodia’s premier banking institutions.
Besides the favourable environment, Canada’s banking sector, especially the Big Six, is known to be a bedrock of stability. In fiscal 2023, net income declined 1% year over year to $3.3 billion due to higher provisions for credit losses. Nonetheless, the bank increased its quarterly dividend by 3.9%. NA is optimistic for the next fiscal year.
“Through strong execution, organic growth, and tight expense management, we delivered solid financial results, generated an excellent return on equity, and maintained robust capital levels in 2023,” said Laurent Ferreira, NA’s President and CEO. If you invest today ($102.60 per share), the dividend yield is 4.14%.
Dividend program
The key sign to invest in Canada’s second-largest telecommunications firm is its dividend aristocrat status. TELUS has raised its dividend for 19 consecutive years. Also, the company’s dividend program targets semi-annual dividend increases of 7% to 10% through year-end 2025. At only $23.71 per share, the current yield is 6.36%.
Its President and CEO, Darren Entwistle, said TELUS achieved strong financial and operational results in 2023, notwithstanding a highly competitive industry, a challenging macroeconomic landscape, and a dynamic regulatory environment. According to its CFO, Doug French, the solid operational and financial results in Q4 2023 were due to the consistent focus on profitable customer growth and cost efficiency.
In the three months ending December 31, 2023, net income rose 17% to $310 million versus Q4 2022. The 126,000 net additions in Mobile Phone were the best fourth quarter since 2011, while the 1.26 million mobility and fixed customer additions in 2023 are new highs.
New ‘king’ on the block
Fortis is Canada’s second dividend king. The dividend increase in 2023 marks 50 consecutive years of annual dividend increases. Because of this incredible feat, your money is safe with this $26 billion highly regulated electric and gas utility company. At $53.04 per share, the dividend offer is 4.49%.
The best assurance to invest in FTS came from its President and CEO, David Hutchens. “We remain focused on extending this track record as we execute our $25 billion five-year capital plan in support of our annual dividend growth guidance of 4-6% through 2028,” said Hutchens.
Stocks for keeps
National Bank of Canada, TELUS, and Fortis are among the safest dividend stocks you can hold for years. You might even keep these stocks and never sell them at all.
