If you’re looking to multiply your hard-earned savings and earn reliable passive income at the same time, investing in Canadian dividend stocks could be a great option. Large-cap stocks with strong, robust business models and stable cash flows try to reward their investors with regular dividends. Moreover, most of them have a strong financial position that can withstand economic downturns and market volatility, which could help protect your invested capital in the long run.
In this article, I’ll talk about three such safe Canadian dividend stocks you can buy and hold forever.
Enbridge stock
Enbridge (TSX:ENB) is arguably one of the most reliable and resilient energy infrastructure companies in Canada. Interestingly, it has rewarded investors with dividends for nearly seven decades and raised dividends for 29 years. ENB currently has a market cap of $102.8 billion as its stock trades at $48.38 per share after rising by 4% in the last month. At the current market price, it offers a very attractive 7.5% annualized dividend yield.
The company operates a large pipeline network that transports oil and natural gas across North America. Moreover, Enbridge’s business model is mainly focused on long-term contracts with customers, which makes its cash flow highly predictable.
Even as volatile commodity prices and a slowing global economy have affected the financials of most energy companies in the last few years, Enbridge’s earnings have gone up by 5% in the five years between 2018 and 2023. This reflects its ability to perform well even in challenging economic times, making it a reliable Canadian dividend stock to buy in the long run.
Royal Bank of Canada stock
The largest Canadian bank, Royal Bank of Canada (TSX:RY), is also one of the best dividend stocks in Canada. After ending 2023 with 5.3% gains, RY stock hasn’t seen any notable change in 2024 so far, as it currently trades at $134.72 per share with a market cap of $189.8 billion. The banking giant offers a decent annualized dividend yield of 4.1% at the current market price.
Royal Bank has a diversified portfolio of businesses, including personal and commercial banking, wealth management, capital markets, and insurance. To show you how solid its business model is, both its revenue and earnings have increased by 32% in its previous five fiscal years despite facing the global pandemic-driven challenges in between.
As the bank remains focused on expanding its digital capabilities and international presence, I expect its earnings growth to remain strong in the coming years, which should help its share prices trade positively.
BCE stock
Last but not least, I want to highlight another large-cap Canadian stock, BCE (TSX:BCE), that offers stable and growing dividends along with decent capital-appreciation potential. BCE is Canada’s largest communications firm with a market cap of $42 billion as its stock trades at $46 per share after sliding by 12% year to date. The recent declines in its share prices, however, have made BCE’s annualized dividend yield even more attractive, which currently stands at around 8.7%.
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The telecom company’s earnings have declined in the last five years despite a more than 5% increase in its total revenue during the same period due mainly to the recent weakness in advertising and consumer spending. Nonetheless, its long-term growth outlook still looks strong as it continues to invest heavily in expanding and upgrading its network infrastructure, which should give it an edge over its competitors and enable it to expand its customer base in the years to come.
