Investing in dividend stocks early on can make a huge difference to any eventual retirement income stream. This comes thanks to years of future dividend reinvestments and growth, which, if you pick the right stocks, can be lucrative and a completely passive experience.
So, what are those dividend stocks that can provide that set-and-forget experience? The market is full of options now, but there are two screaming buys to consider.
These picks can offer investors growth, high yields and some defensive appeal and come packaged in a discounted shell.
Pick #1: The defensive titan
There are few, if any, investments on the market that can provide the defensive appeal of a utility stock. Utilities generate a reliable revenue stream that is backed by long-term, regulated contracts.
Note that, unlike retail or telecom stocks, utilities also provide a necessary service for which there is no alternative. And that’s just part of the reason why one of the dividend stocks investors should consider right now is Fortis (TSX:FTS).
The company boasts operating regions that blanket parts of Canada, the Caribbean and the United States. More importantly, Fortis’s insatiable appetite for growth has allowed it to become one of the largest utility stocks on the continent.
In terms of income, Fortis provides investors with a handsome quarterly dividend, which currently pays out a respectable 4.22%.
Another key reason Fortis should be one of the dividend stocks for your portfolio is the company’s impressive record for increases. Fortis has provided investors with annual upticks to its dividend for a whopping 50 consecutive years without fail.
This makes it the ultimate set-and-forget option right now.
Pick #2: The energy infrastructure behemoth
Another of the dividend stocks to consider right now for any portfolio is Enbridge (TSX:ENB). Enbridge is best known for its pipeline network, but in reality, the company does far more.
That pipeline network hauls massive amounts of natural gas and crude. It hauls so much that the reliance on Enbridge has created a massive defensive moat around its operations.
In case you’re wondering, Enbridge transports a whopping 20% of all North American-produced crude and nearly one-third of the natural gas needs of the entire U.S. market.
Suffice it to say, that pipeline network accounts for the bulk of Enbridge’s revenue stream, but there are other intriguing segments.
That includes Enbridge’s growing renewable energy segment. Renewable energy stocks are growing in importance, and few investors may realize that Enbridge is an established player in the field. The company boasts a portfolio of over 40 facilities located across North America and Europe.
Those facilities generate a reliable and recurring revenue stream for Enbridge, which is backed by long-term, regulated contracts.
Speaking of regulated contracts, Enbridge also boasts the largest natural gas utility on the continent. This is yet another example of an additional revenue stream that ultimately lets Enbridge invest in growth and pay a very handsome dividend.
Enbridge is one of the dividend stocks that should be on the radar of every single investor. The company offers a quarterly dividend, which currently pays out an insane yield of 7.29%. This handily makes Enbridge one of the best-paying dividends on the market.
That’s not all.
Enbridge has provided investors with handsome annual upticks to that dividend for an incredible three decades without fail. This fact alone makes Enbridge one of the must-have dividend stocks to own right now.
Selecting the right dividend stocks for your portfolio
No stock, even the most defensive, is without some risk, and that includes both Enbridge and Fortis.
Fortunately, both dividend stocks mentioned above also offer some defensive appeal in addition to their juicy yields. They also offer some discounted appeal.
In the case of Enbridge, the stock currently trades down over 12% over the trailing two-year period. Over that same period, Fortis boasts a double-digit discount of 13%.
Given the immense defensive appeal and income-earning capabilities of both stocks, it makes both dividend stocks hard to ignore options.
In my opinion, one or both dividend stocks should be core holdings in any well-diversified, long-term portfolio.
Buy them, hold them, and watch them (and your future income) grow.
