Investing in dividend stocks offers Canadians a tonne of advantages. In addition to the potential capital gains you can make holding these stocks, you can also earn significant passive income, helping to compound your capital quicker. However, like any other stocks you’re looking to buy, it’s essential to find the highest quality companies that you can ideally hold for years to come.
Investing is all about personal preference. Some investors may prefer higher-yield stocks with less growth potential, while others may be willing to sacrifice some yield in order to find stocks that will consistently increase their dividends each year. For most investors, though, a balance between the two will be an ideal mix.
So, with that in mind, if you’re looking to build a portfolio that can generate passive income for decades, here are four of the best Canadian stocks to buy now and hold forever.
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An impressive green energy stock to hold for decades
Finding high-quality dividend stocks that you can have confidence owning for years is all about looking for the highest-quality companies with solid business models.
That’s why Brookfield Renewable Partners (TSX: BEP.UN), a leader in the renewable energy sector, is one of the best stocks to buy now.
The world is going through a significant transition to increase its reliability on cleaner energy and slowly phase out fossil fuels, all while the demand for energy continues to rise each year.
Therefore, a stock like Brookfield doesn’t just have significant growth potential for five or 10 years. It has a massive runway of growth that could last for decades to come.
Furthermore, with a massive portfolio of assets, which are diversified all over the world and significant partnerships with major corporations, Brookfield has demonstrated why it’s one of the very best green energy stocks to buy now.
Additionally, the stock is currently trading near the bottom of its 52-week range, and its yield has also climbed to more than 6.7% as the stock has sold off.
So, if you’re looking to boost your passive income, not only can you buy Brookfield stock while it’s ultra-cheap today, but you can also lock in an incredible yield.
A top retail stock offering both growth potential and an attractive yield
It’s not often that retail stocks are some of the best dividend stocks to buy, however, Canadian Tire (TSX: CTC.A) has proven that it’s certainly an exception.
Canadian Tire is one of the best-known retailers in the country, and even with a significant impact on its operations over the last few years, its dividend has remained sustainable.
For example, in 2023, as higher inflation and interest rates weighed on consumer spending, Canadian Tire’s normalized earnings per share temporarily dipped from $18.75 in 2022 to $10.37 in 2023, a decrease of more than 44%.
Yet even with that impact on its operations, its annual dividend of $6.90 per share remained intact. In fact, toward the end of 2023, Canadian Tire increased it to $7.00 per share, and in 2024, it again increased its annual dividend to $7.10 a share.
Therefore, considering the long-term growth potential the retailer has and the 4.4% dividend yield it offers today, it’s undoubtedly one of the best dividend stocks to buy now.
Two top royalty stocks for dividend investors to buy now
If you’re a passive income seeker, some of the best dividend stocks to buy are royalty companies like Freehold Royalty (TSX: FRU) and Pizza Pizza Royalty (TSX: PZA).
These stocks were made for passive income seekers with low-risk business models that see them consistently collect royalty payments and then return the majority of their earnings to investors.
For example, Freehold earns a royalty on all the oil and gas produced by other energy stocks on the land that it owns. Pizza Pizza, however, earns a royalty from all the sales done at each of its locations across the country.
That allows these stocks to offer higher yields than many of the peers in their sector, with Freehold’s yield currently sitting at roughly 8.3%, while Pizza Pizza’s dividend yield has recently risen to roughly 7.2%.
So, if you’re looking to boost your passive income today, these are two of the best dividend stocks you can buy now.
