As the economic and stock market environments remain uncertain, now is an excellent time to boost your passive income. Luckily, with many high-quality dividend stocks trading off their highs, there is a tonne of opportunity for investors to buy some of the top dividend stocks in Canada right now.
Earning passive income is never a bad idea, but it’s especially ideal to build up your passive income stream in these economic conditions. There’s no telling how the market may recover over the next few months or whether or not the economy will finally enter a recession.
Plus, if the environment were to worsen before it improves, the passive income you earn from top Canadian dividend stocks could be the only gains you see until the market bottoms and stocks start to recover fully.
Therefore, as long as you ensure the dividend stocks you’re looking to buy now are high-quality and reliable businesses, there’s no question that these are some of the top stocks to add to your portfolio today.
So, if you’ve got cash that you’re looking to invest and want to boost your passive income stream, here are two of the top Canadian dividend stocks to buy right now.
One of the best Canadian dividend stocks to buy now and hold for years
When it comes to finding high-quality dividend stocks to buy, some of the best companies I like to start with are royalty companies such as Pizza Pizza Royalty (TSX:PZA).
Unlike other non-royalty restaurant stocks, Pizza Pizza Royalty’s business model isn’t to own any restaurants or locations itself. Instead, it earns a royalty on all sales made across the country.
This is important for two reasons. First, it lowers the risk of the investment since Pizza Pizza doesn’t have to worry about the individual profitability of the stores; instead, its main focus is on driving up the total level of sales at all of its restaurants.
Meanwhile, it makes it the perfect dividend stock to buy and hold for years. Not only is Pizza Pizza constantly receiving millions in cash from royalty payments, but the company also has very minimal expenses, allowing it to pay out nearly all of the cash that it’s bringing in.
Another major benefit of Pizza Pizza is that the brand is well-known as a low-cost and convenient option. Often open later at night than its competitors, and with a wide range of affordable options on its menu, Pizza Pizza is one of the most resilient stocks in the restaurant space, as we’ve seen time and again.
Not only did it see fewer impacts on its business from the lockdowns in the pandemic, while other restaurant stocks suffered significantly, but even in the current environment in which consumer discretionary income has been heavily impacted, Pizza Pizza has continued to grow its sales and consequently its dividend.
In fact, in just the last three years, it’s increased its monthly dividend on seven separate occasions. Plus, with the stock is trading off its highs today, its yield has increased recently, now sitting at roughly 6.7%.
Therefore, while the stock trades off its highs and offers such a compelling yield, it’s certainly one of the best dividend stocks to boost your monthly passive income.
A reliable and high-potential Canadian REIT
In addition to Pizza Pizza, another excellent monthly dividend stock to buy now, particularly in such an uncertain economic environment, is a high-quality residential REIT like Canadian Apartment Properties REIT (TSX:CAR.UN).
CAPREIT owns properties all over the country, well diversifying its operations. Furthermore, as the largest residential REIT in Canada it’s not only proven for years how resilient it can be, but it also offers plenty of growth potential, especially when interest rates begin to decrease again.
For example, over the last decade, there wasn’t a single year in which its revenue didn’t grow by at least 5.4%. And over the entire stretch, its revenue grew at a compounded annual growth rate of 8.4%.
So, while it only offers a yield of roughly 3% today, it offers more long-term capital gains potential than Pizza Pizza, not to mention it also regularly increases its monthly distribution to investors.
Therefore, if you’re looking for top dividend stocks to buy now, CAPREIT is certainly a high-quality investment you’ll want to consider.
