Who doesn’t want to see their savings grow while earning a steady stream of income? While there are many ways of building passive income, investing in high-quality dividend-paying stocks remains one of the most reliable and arguably the easiest options for Canadian investors. By adding fundamentally strong dividend stocks to your portfolio, you can turn your hard-earned savings into a passive-income powerhouse.
In this article, I’ll highlight two Canadian dividend stocks that offer a great combination of attractive yields and long-term growth potential, making them ideal for generating passive income for decades.
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IGM stock
Whether you’re just starting your passive income journey or looking to enhance your existing portfolio, IGM Financial (TSX: IGM) could be an excellent pick. This Winnipeg-headquartered wealth and asset management company currently has a market cap of $11.2 billion as its stock trades at $47 per share after surging by 34% so far in 2024. Although IGM stock has outperformed the broader market by a wide margin this year, it still offers a 4.8% annualized dividend yield.
Not only is IGM’s current dividend yield attractive, but its financial performance in 2024 has also been impressive. In the third quarter ended in September 2024, the company achieved record-high assets under management and advisement of $264.9 billion, reflecting a strong 16.5% YoY (year-over-year) increase. IGM’s adjusted quarterly earnings climbed by 17.1% from a year ago to $1.03 per share with the help of strong growth across its core wealth and asset management segments.
In addition, the company’s strategic investments, such as its stake in Wealthsimple, have shown notable growth, with Wealthsimple’s valuation increasing by 46% sequentially in the most recent quarter. These developments establish IGM Financial as not just a reliable dividend payer but also a forward-looking financial services firm that continues to adapt to evolving market trends, which should help its share prices inch up in the long run.
Brookfield Renewable stock
For investors looking to create a sustainable and long-term passive-income stream, Brookfield Renewable Partners (TSX: BEP.UN) could be another excellent option to consider right now. After advancing by nearly 17% over the last nine months, its stock currently trades at $36.19 per share with a market cap of $10.3 billion. At the current market price, it has an annualized dividend yield of 5.5%.
Specializing in solar, wind, hydroelectric, and energy storage assets, Brookfield Renewable is not only a consistent dividend payer but also a company actively building a future-ready energy portfolio. In the most recent quarter, the company reported an 11% YoY increase in its funds from operations to US$278 million, with improving operational efficiency and growth in its revenue-generating assets.
In the September quarter alone, Brookfield commissioned 1,200 megawatts (MW) of new renewable capacity. With 200,000 MW of total pipeline capacity and 65,000 MW in advanced stages, the company is fast emerging as a global force in the renewable energy space. As the demand for clean energy continues to rise across the globe, Brookfield Renewable seems well-positioned to benefit from this trend, which could help it continue rewarding loyal investors with increasing dividends.
