Investing in the stock market isn’t always about earning eye-popping returns. Sometimes, it’s also about generating a steady passive-income stream that can help you meet your financial goals. Dividend stocks give investors a smart way to generate periodic dividends that are paid out of their profits. These dividends can be reinvested to buy more shares or used as a source of income for living expenses or retirement savings.
In this article, I’ll highlight three of the best Canadian dividend stocks that you can buy with an investment as low as $3,000, ideal for long-term holding.
Source: Getty Images
Enbridge stock
Enbridge (TSX: ENB) is the first stock in my list of best dividend stocks in Canada to hold for the long term. It currently has a market cap of $108.5 billion as its stock trades at $49.74 per share after surging by 12.8% over the last nine months. Despite these sharp recent gains in its share prices, ENB stock offers an attractive 7.4% annualized dividend yield.
Interestingly, this Calgary-based energy infrastructure giant is responsible for transporting about 30% of the oil produced in North America. It has a diversified portfolio of assets, including pipelines and storage facilities. Enbridge’s well-established business model and predictable cash flows have allowed it to raise dividends for 29 consecutive years.
Moreover, Enbridge’s gradually growing interest in crude oil export and renewable energy sectors makes it a solid investment option for income-seeking investors.
Canadian Natural stock
Canadian Natural Resources (TSX: CNQ) is another large-cap dividend stock in Canada you can bet on for the long term. It currently has a market cap of $104.3 billion as its stock trades at $48.92 per share after witnessing around 29% gains in the last year. At this market price, CNQ stock has a decent 4.3% annualized dividend yield.
In the five years between 2018 and 2023, Canadian Natural’s revenue rose 71% from $21 billion to $36 billion. More importantly, its adjusted annual earnings in these five years jumped by 190% from $1.34 per share in 2018 to $3.87 per share in 2023.
Besides its diversified asset base, the company’s continued focus on operational efficiency and strategic capital allocation makes it a very reliable dividend stock to buy now and hold for as long as you want.
Bank of Montreal stock
Bank of Montreal (TSX: BMO) is currently the third-largest Canadian bank based on its market cap of $86.9 billion as its stock trades at $118.99 per share. Although the stock is currently down 9.2% on a year-to-date basis, it has seen an 8.7% upward movement over the last nine months. BMO stock currently has a 5.2% annualized dividend yield.
In the five fiscal years ended in October 2023, Bank of Montreal’s revenue saw a 23.4% increase to $28.4 billion. Similarly, its adjusted earnings in these five years went up from $8.99 per share to $11.73 per share, reflecting a solid 30.5% rise. The continued underlying strength in its fundamentals encouraged BMO to raise its dividend per share by roughly 53% during this period.
As potential rate cuts boost the demand for financial services in the near term, BMO stock could witness a sharp recovery. Given that, you may consider buying it on the dip right now.
