Finding the perfect mix of income stocks can help generate a very healthy dividend income that can make retirement very comfortable. Fortunately, there’s no shortage of income producers on the market, including some of the smartest dividend stocks to buy.
Prospective investors looking to buy some of those smartest dividend stocks should strongly consider these stocks — even if you only have $5,000.
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Start with a solid, defensive income producer
One of the first options to consider purchasing should be Fortis (TSX: FTS). For those who aren’t familiar with the stock, Fortis is one of the largest utility stocks on the market. The company boasts operations across Canada, the U.S., and the Caribbean.
Utilities are well-known for their defensive appeal. That’s because they generate a stable and recurring revenue stream backed by long-term contracts that span decades. This allows Fortis to invest in growth and pay out a generous dividend.
That dividend currently works out to a 4.12% yield. This means that prospective investors with $5,000 to drop into Fortis will generate an income of just over $200.
That’s not enough to retire on, but it is enough to generate a few shares each year through reinvestments. In other words, Fortis isn’t only one of the smartest dividend stocks to buy; it’s also a great buy-and-forget option.
Oh, and let’s not forget that Fortis has provided investors with annual upticks to that dividend for an incredible 51 consecutive years without fail. The company is also currently looking to continue that cadence with 4-6% increases through 2029.
Sprinkle in a bank stock with a juicy yield
Canada’s big banks are often mentioned as some of the best options for long-term investors. There are plenty of reasons for that view. That includes their well-regulated (and stable) domestic market, juicy dividend payouts and long-term growth prospects.
Bank of Nova Scotia (TSX: BNS) is one of the smartest dividend stocks for investors to consider right now. Scotiabank isn’t the largest of the big banks, but it is Canada’s most international bank.
And it’s that international presence that screams long-term growth. Scotiabank has invested heavily in both Latin American and U.S. markets over the past years. This has not only provided a growing source of revenue but also diversified the bank outside of its core domestic market.
As an income stock, just calling Scotiabank one of the smartest dividend stocks doesn’t do it justice. Part of that is because the bank has been paying out juicy dividends since 1833 without fail.
Let that insane amount of time sink in for a moment while I mention the current yield of 5.85%. That’s enough to generate just shy of $300 in dividends, which can provide growth through dividend reinvestments.
And like Fortis, Scotiabank has provided annual upticks to that dividend for years and has no plans to stop that cadence.
The smartest dividend stocks
Both Fortis and Scotiabank are some of the smartest dividend stocks for investors to buy right now. Both offer ample defensive moats, growing revenue and solid income-earning potential.
In my opinion, one or both should be core holdings as part of any well-diversified portfolio.
Buy them, hold them, and watch them (and your future income) grow.
