Embarking on the investment journey is essential to financial independence and wealth accumulation. However, as important as it is to start investing as early as possible to take advantage of the power of compounding, it can also be pretty overwhelming at first, with so many options like growth stocks, value stocks, and dividend stocks to pick from.
That’s why many investors start with high-quality stocks with reliable operations that can be core holdings in their portfolios for years.
Finding high-quality dividend stocks that can begin to return you cash instantly and have years of growth potential is essential. Over the long haul, these stocks will provide attractive growth and help power your portfolio to new heights.
Plus, in times of turmoil or elevated uncertainty, these stocks can help protect your hard-earned capital much more than higher-risk stocks that tend to be more volatile.
So, not only are these some of the best stocks for beginners to buy to get their portfolios started, but given the uncertain nature of the economy and the stock market environment today, they are undoubtedly some of the best stocks to buy now.
With that in mind, if you’re looking for high-quality dividend stocks today, here are two of the best to buy and hold for years to come.
A top Canadian real estate investment trust
Investing in real estate has many advantages, which is why several high-quality dividend stocks can be found in the real estate sector. While there are plenty of top stocks to choose from, one of the very best is Canadian Apartment Properties REIT (TSX:CAR.UN), the largest residential REIT in Canada.
Residential REITs are some of the best investments to consider, especially if you’re just starting out since the industry is so defensive. People always need a place to live, making these stocks highly recession-resistant.
Furthermore, because they are constantly generating revenue and receiving tonnes of cash all the time and can generally keep their costs manageable, high-quality REITs typically return cash to investors every single month.
In CAPREIT’s case, the REIT owns assets all across Canada. This diversification is essential because it helps to mitigate risks if one region may underperform the rest of the country. However, it also offers exposure to more growth potential for the dividend stock if some areas of the country see faster average rent growth or more demand from potential tenants.
Over the last decade, CAPREIT has seen its revenue increase every single year. That includes periods of higher uncertainty, such as the oil slump in 2014 and 2015 and the pandemic through 2020. Furthermore, over the 10-year stretch, CAPREIT’s revenue has grown at a compounded annual growth rate (CAGR) of 8.4%.
While consistent revenue growth is certainly impressive, what’s more impressive is that over the last decade CAPREIT has also never had a single year where its funds from operations (FFO) per unit declined either.
So, if you’re looking for a high-quality and reliable dividend stock to buy now and get your portfolio started, a top-notch residential REIT like CAPREIT is certainly an excellent choice.
One of the best Canadian dividend stocks to buy and hold for the long haul
In addition to CAPREIT, another impressive Canadian dividend stock with significant long-term potential and highly reliable business operations to buy today is Brookfield Infrastructure Partners (TSX:BIP.UN).
Brookfield owns essential infrastructure assets in countries all over the world. The assets it owns and services it offers, such as pipelines, cellphone towers, railroads, and much more, are all extremely defensive. Furthermore, because they are diversified all over the globe, Brookfield can mitigate a tonne of risk.
However, although Brookfield’s core operations are significantly defensive, the stock isn’t a boring investment that simply returns investors a dividend. Instead, Brookfield is constantly looking to sell its more mature assets and use the proceeds to invest in new opportunities to drive significant long-term growth of its operations.
This allows it to target a 5-9% increase in the dividend each year. Today, that distribution has a yield of roughly 5.7%.
So, if you’re looking to start investing or just looking for a high-quality and reliable dividend stock today, Brookfield is certainly one of the best picks Canadians can consider.
