3 Unstoppable Dividend Stocks That Could Pay You for Life

Each of these Canadian dividend aristocrats is reliable and offers attractive dividend growth, making them three of the best stocks to buy now.

| More on:
A plant grows from coins.

Source: Getty Images

Not surprisingly, dividend stocks are a popular investment choice among Canadians, especially considering they offer attractive capital gains and significant passive income.

Moreover, dividend stocks typically provide a significant degree of reliability and safety. To start paying dividends, companies must have a considerable track record of profitability or at least a strong expectation of consistent returns in the years ahead.

However, not every dividend stock is reliable or worth an investment. When adding dividend stocks to your portfolio, selecting companies that offer a solid mix of reliability and growth potential is crucial.

Without reliability, these stocks could face challenges that impact their profitability and force them to cut dividends. Such a scenario would be disastrous for two reasons. It would reduce the passive income you receive from that investment and it would also significantly decrease the value of your investment.

On the other hand, without significant growth potential, you might earn the same dividend or return for years, which inflation will erode over time. And even if a stock does offer growth potential, if it grows slower than inflation, you’re still technically earning a smaller and smaller return over the long term.

Therefore, if you’re seeking high-quality dividend stocks to buy now and hold for years, it’s essential to choose stocks that are both reliable and defensive but also possess significant growth potential, stocks such as CT REIT (TSX:CRT.UN), Parkland (TSX:PKI) and Canadian Utilities (TSX:CU), all of which are on the Canadian dividend aristocrats list.

Real estate is an excellent industry for finding high-quality dividend stocks

When looking for unstoppable dividend stocks that can pay you for life, essentially every industry will have at least a few. That said, one of the best industries to look in first, with several high-quality dividend stocks, is the real estate sector, where one of the very best is CT REIT.

CT REIT is a retail REIT whose majority owner and largest tenant is Canadian Tire, accounting for roughly 90% of its revenue. This relationship is key for CT REIT, especially since Canadian Tire is one of Canada’s largest and best-known retailers.

It gives CT REIT high reliability, especially as a retail REIT in an environment where e-commerce continues to disrupt typical retail operations, pressuring landlords across the country.

Therefore, it’s considerably noticeable that since going public, CT REIT has never had a year in which it didn’t increase its sales or dividends, including through the pandemic when many retail REITs were significantly impacted.

Today, with the dividend stock trading off its high, it offers investors a yield of roughly 6.5%. Therefore, if you’re looking for a high-quality stock that could generate significant passive income for life, CT REIT is one you’ll definitely want to consider.

Energy and utility stocks offer a tonne of resiliency

In addition to real estate, energy and utility stocks are also businesses with essential operations and consistent cash flow, creating several unstoppable dividend stocks.

For example, Canadian Utilities is one of the most defensive stocks on the market, with highly essential and government-regulated utility assets that offer predictable revenue streams. Furthermore, it also has highly diversified operations, owning energy storage and electricity generating assets.

Therefore, it’s unsurprising that Canadian Utilities has the longest dividend growth streak in Canada, at 51 consecutive years. So, with Canadian Utilities trading cheaply, offering a yield of more than 5.6%, a track record of continuous dividend growth and a highly manageable payout ratio of just 77%, it’s certainly one of the top dividend stocks Canadian investors can buy.

As a fuel refiner, distributor and owner of gas stations and convenience stores, Parkland is similar in many ways to Canadian Utilities. Its operations may not be as safe as a utility stock, but because they are essential, the stock can consistently generate significant cash flow.

Furthermore, while it may be less defensive, the tradeoff is that it offers more growth potential. Not to mention, Parkland is well diversified, too, thanks to its vertically integrated operations.

Therefore, although it offers a lower yield than Canadian Utilities, at just 3.5%, it has the potential for more significant capital gains over the long haul. So, if you’re looking for a high-quality dividend stock to buy today, Parkland is certainly one to keep on your watchlist.

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.

Fool contributor Daniel Da Costa has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Hour glass and calendar concept for time slipping away for important appointment date, schedule and deadline
Dividend Stocks

This 8% Dividend Stock Pays Cash Every Month

Earn monthly cash of $154 with this 8% dividend stock.

Read more »

oil tank at night
Dividend Stocks

Think Oil Is Going Higher? 3 Dividend Stocks to Buy Now

Looking for steady dividend growth? These three Canadian oil stocks could provide substantial dividend income in the coming years.

Read more »

Profit dial turned up to maximum
Dividend Stocks

This 7% Dividend Stock on the TSX is Worth Watching

With this superb TSX stock now trading at the bottom of its 52-week range, it's certainly a dividend stock you'll…

Read more »

edit Businessman using calculator next to laptop
Dividend Stocks

2 TSX Dividend Stocks to Buy While They Still Offer Great Yields

These top dividend-growth stocks now offer 7% dividend yields.

Read more »

Dots over the earth connecting the world
Dividend Stocks

1 Magnificent Dividend Stock Down 23% to Buy Right Now Near a Once-in-a-Decade Valuation

Patient investors could be happy with this dividend stock a few years down the road.

Read more »

Human Hand Placing A Coin On Increasing Coin Stacks In Front Of House
Dividend Stocks

Best Stocks to Buy in May 2024: TSX Real Estate Sector

Besides yielding stable monthly passive income, these top TSX real estate stocks could help you earn high returns on your…

Read more »

exchange-traded funds
Dividend Stocks

These 2 Dividend ETFs Are a Retiree’s Best Friend

Retirees looking for steady income will love these two Canadian dividend ETFs

Read more »

Bad apple with good apples
Dividend Stocks

Safe and Sound Stocks for Canadians: My Top 5 Choices

Want some of the best stocks for Canadians right now? Here's my top 5 list of stocks to buy today…

Read more »