Many investors use the stock market as a way of generating passive income. They do this by investing in dividend stocks. In my opinion, that’s a great way for the everyday Canadian to get some extra change in their pocket since dividend stocks have a much lower barrier to entry compared to other methods of passive-income generation. In this article, I’ll discuss three great dividend stocks that Canadians should consider investing $10,000 in.
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This is one of the best dividend stocks around
Fortis (TSX:FTS) is the first stock that I think passive-income seekers should consider investing in today. This is a solid company that provides regulated gas and electric utilities to more than three million customers across North America. If you own or rent a home, you should know that utilities are paid on a monthly basis. That means companies like Fortis are able to take advantage of a very predictable and stable source of income.
Fortis makes use of that advantage by planning dividend distributions far ahead of their payment dates. In fact, the company has already announced its plans to continue raising its dividend distributions at a rate of 4-6% through to 2028. That would extend Fortis’s dividend-growth streak to about 55 years.
$10,000 invested in Fortis stock would allow you to purchase 186 shares. As of its current dividend rate, shareholders receive $0.59 per share each quarter. That means 186 shares could net you about $439 in dividends each year. Knowing Fortis will be increasing those distributions over the coming years means your source of passive income could continue to grow in the future.
A great dividend stock for your portfolio
Bank of Nova Scotia (TSX:BNS) is another great dividend stock that passive-income seekers should consider today. It’s one of the largest banks in Canada with respect to assets under management, market cap, and revenue. Among its peers, Bank of Nova Scotia stands out, in my opinion, due to its international presence. I believe this company’s business outside of Canada could drive its growth over the coming years.
Looking at its dividend history, Bank of Nova Scotia appears unmatched by nearly all companies on the TSX. It first paid shareholders a dividend on July 1, 1833. Since then, it has never missed a payment. That means Bank of Nova Scotia is going on 191 years of continuous dividend payments.
Its most recent dividend payout was $1.06 per share. Considering that Bank of Nova Scotia pays a dividend on a quarterly basis, we can assume that investors will receive $4.24 per share on an annual basis if the company doesn’t change its distribution amount. With $10,000, investors could purchase 156 shares. With that, you could receive $661 per year based on the $4.24 dividend per share.
A bona fide blue-chip company, Bank of Nova Scotia is a Canadian market leader that could generate a solid source of passive income for you for years to come.
