2 Canadian Dividend Stocks to Buy Hand Over Fist in March 2024

Here are two of the best Canadian dividend stocks you shouldn’t miss buying in March.

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The Canadian stock market has been volatile in the last year as investors grapple with uncertainty about inflation, monetary policy, and geopolitical tensions. Despite a significant rally among many growth stocks over the last six months, fueled by growing expectations of interest rate cuts in the near term, there’s still a risk that prolonged high rates could push these stocks down once more.

In such uncertain economic times, you may want to consider adding some reliable dividend stocks to your portfolio right now, which can reduce your overall risk and provide you with a steady income stream even amid temporary market downturns. Here are two of the best Canadian dividend stocks you can buy hand over fist in March 2024, as they offer sustainable dividends and strong growth prospects.

A top dividend-paying Canadian bank stock

The first dividend-paying Canadian stock that you should consider buying in March 2024 is Toronto-Dominion Bank (TSX:TD). Based on its market capitalization of $144.5 billion, TD is currently Canada’s second-largest bank, as its stock currently trades at $81.53 per share with 4.8% year-to-date declines. The stock offers a 5% annualized dividend yield at this market price.

In the first quarter of its fiscal year 2024 (ended in January), the bank’s revenue rose 4.7% YoY (year over year) to $13.7 billion, exceeding Street analysts’ expectations of $12.6 billion. However, its adjusted quarterly earnings of $3.6 billion reflected a more than 12% decline from a year ago due mainly to increased non-interest expenses and provisions for credit losses.

However, TD Bank’s strong financial base and robust cash flows give it the ability to navigate the current challenges and continue distributing attractive dividends. This factor, along with the bank’s healthy margin and consistent focus on digital transformation and customer experience, brightens its long-term financial growth outlook, which should help its share prices recover quickly as soon as the macroeconomic environment improves.

And a top energy stock with reliable dividends

Whether you’re investing in growth or dividend stocks, you should always diversify your portfolio to minimize risks. Keeping that in mind, my second dividend stock pick is Canadian Natural Resources (TSX:CNQ) — one of Canada’s largest oil and gas companies based on its market cap of $104.2 billion. CNQ stock currently trades at $ 97.25 per share with 12% year-to-date gains, outperforming the TSX benchmark, which has seen around 4% gains in 2024. At the current market price, this Canadian energy stock offers a decent annualized dividend yield of 4.3%.

In 2023, Canadian Natural achieved annual record production and reduced debt with the help of its efficient operations. Although a sharp YoY decline in West Texas Intermediate crude oil prices pressured its revenue and earnings last year, the company’s financial growth should improve in the ongoing year due mainly to a recent recovery in oil prices.

Interestingly, Canadian Natural’s management recently noted that it “will now target to return 100% of free cash flow to shareholders through dividends and share buybacks,” reflecting its commitment to rewarding its shareholders, making it a great stock for income investors.

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.

The Motley Fool recommends Canadian Natural Resources. The Motley Fool has a disclosure policy. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

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