Canadians continue to seek out dividend stocks for passive income, and that trend continued into April of this year. However, there might be fewer changes for some companies offering high yields at a great price.
Today, we’re going to look at a few sectors and stocks to match that remain valuable for investors. Without further ado, let’s get into it.
Banks
Canadian banks continue to be one of the best areas for investors to consider looking at dividend stocks. Banks have been making a recovery over the last year as higher interest rates and inflation caused Canadians to take out their investments.
Yet what we’ve seen is that cream rises to the top. Banks that managed to see growth in sectors even while preparing for loan losses have seen shares rise back the fastest. Yet, of them all, there are two that still offer the best value.
Royal Bank of Canada (TSX: RY) has seen shares return to all-time highs. And yet it still offers more growth as the company not only improves its bottom line but expands it. This is in two ways. The company has been investing in growing and emerging markets. It’s also acquired HSBC Canada. This has provided a new stream of income from wealthy newcomers to Canada. This will certainly grow its wealth management branch as well. All while providing a dividend yield of 3.94% as of writing.
Then there’s Bank of Nova Scotia (TSX: BNS), better known as Scotiabank. While Scotiabank stock hasn’t returned to all-time highs, it’s been heavily invested in Latin America and with more focus on Mexico. These emerging markets could create high-growth opportunities for investors, again while holding a solid 6.19% dividend yield as of writing.
Utilities
Another area where investors should certainly look for dividend stocks is in the utilities sector. Utilities are considered essential businesses. They offer steady cash flow from recurring revenue. And what’s more, this remains in place no matter the market.
While costs going up might influence utility companies, overall, they hold a solid position for those wanting long-term holds. In fact, the only two Canadian Dividend Kings are both utility stocks! These are Canadian Utilities (TSX: CU) and Fortis (TSX: FTS).
Fortis stock is a diversified electricity and gas utility company. It serves Canada, the United States, and the Caribbean and recently became a Dividend King, increasing its dividend for 50 consecutive years. Meanwhile, the company has beaten estimates quarter after quarter during this last year. All while strengthening its bottom line through a sale of its Aitken Creek asset, and annual net earnings hitting $1.5 billion.
Then there’s CU stock, the original Dividend King. Just like Fortis stock, the diversified energy infrastructure company offers natural gas and electricity around the world. It holds a diverse network of pipelines and infrastructure to provide power to residential, commercial, an industrial consumers. And as with Fortis, all while achieving strong earnings of $596 million and strengthening its bottom line. CU stock and Fortis both offer strong dividend yields of 5.91% and 4.42%, respectively.
So, while growth can be nice, certainty and stability can be even better, which is why these are the top four stocks I would certainly consider — not just for company strength but sector strength as well.
