Do you want to have a steady flow of income that grows over time, almost like planting a tree and watching it bear fruit year after year? If so, the good news is that the Canadian stock market offers plenty of such opportunities! I’m talking about fundamentally strong TSX dividend stocks that could practically be seen as coiled springs, ready to jump up and boost your passive income to new heights. Whether you’re just starting out or looking to beef up your investment portfolio, such trustworthy dividend stocks could help you achieve your financial goals faster.
In this article, I’ll introduce you to two of the best TSX dividend stocks you can consider buying in 2024 and holding for decades.
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BCE stock
Whether you’re investing in dividend stocks for passive income or looking for long-term capital appreciation, you should always carefully analyze the financial growth trends and fundamental outlook of the company you’re investing in. Doing so can help you filter out stocks with low growth prospects or unsustainable payouts. One TSX dividend stock that passes this test with flying colours is BCE (TSX:BCE). This Canadian telecommunications giant has consistently raised its dividends for 16 years in a row, regardless of economic cycles.
BCE has a market cap of $42.3 billion as its stock trades at $46.39 per share with nearly 11% year-to-date losses. These declines in its share prices, however, increased its annualized dividend yield, which currently stands at a solid 8.6%.
In the March quarter, BCE achieved the highest first-quarter mobile phone postpaid net activations since 2018, up 4.5% YoY (year over year) to 45,247. Similarly, it was the best first quarter for the company’s retail internet net subscriber activations since 2007, up 13.9% YoY to 31,078, indicating strong demand for their services despite the ongoing economic challenges. To add optimism, its subsidiary Bell Media’s digital revenue surged by 33% YoY last quarter, driven by strong performance in digital platforms and advertising technology.
Economic uncertainties and a shift in consumer behaviour have affected BCE’s earnings in recent quarters. Nonetheless, the company’s focus on reducing capital expenditures while maintaining growth in key areas such as 5G and fibre deployments suggests a balanced approach, which should help its financials improve in the coming years and its share prices recover fast.
Manulife Financial stock
Manulife Financial (TSX:MFC) could be another fundamentally strong TSX dividend stock for investors seeking to earn reliable passive income. This Toronto-headquartered financial services giant has a market cap of $63.1 billion as its stock trades at $35.14 per share after surging by 20% so far in 2024. MFC stock offers a decent 4.6% annualized dividend yield at the current market price.
The recent strength in Manulife’s shares could be attributed to its ability to continue posting strong earnings growth even in a difficult economic environment. In the last four quarters ended in March 2024, the company’s adjusted earnings have surged 15.7% YoY to $3.61 per share with the help of strong business growth across its insurance segments.
Besides the continued strength in its earnings growth trends, the company’s robust capital position and focus on digital transformation brighten its long-term growth outlook, which should help its share prices continue soaring.
