When it comes to generating significant passive income, investors often look to buy high-dividend stocks. However, not all dividend stocks are created equal.
For example, some stocks offer high yields but little to no growth, while others have a strong history of increasing their payouts over time.
The best dividend stocks to own are those that provide both a generous yield and consistent dividend growth, but most importantly, dividends that are sustainable and reliable, ensuring that investors benefit from steady income while seeing their returns grow over time.
So, if you’re looking for high-quality TSX stocks that offer both attractive yields and consistently increasing payouts, here are two of the best stocks to buy now.
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A top utility stock with a high yield and over 50 years of consecutive dividend increases
It’s no surprise that the company with the longest dividend-growth streak in Canada is a utility stock, some of the safest and most reliable investments you can make.
Canadian Utilities (TSX: CU) is a top-tier utility company with a strong history of stable cash flow and dividend growth. The company operates in a highly regulated industry, which provides reliable revenue and protects against economic downturns.
Utility stocks are well-known for their defensive and low-volatility nature, making them an ideal choice for investors looking to reduce risk while earning consistent passive income.
Plus, not only does Canadian Utilities have reliable and defensive operations and more than half a century of consistent dividend increases, but it also offers investors a current yield of roughly 5.4%, making it one of the best TSX dividend stocks to buy now.
Despite rising interest rates temporarily impacting the profitability of utility stocks, Canadian Utilities remains well-positioned to deliver strong returns. The company continues to invest in its infrastructure, improving efficiency and expanding operations to drive future growth.
So, with interest rates expected to decline in the near term, not only is it an excellent stock to buy for passive income, but it could also see a significant rally in its share price.
Plus, in addition to its reliable operations and, therefore, income, Canadian Utilities is one of the best stocks to buy due to its diversified portfolio of energy assets, including electricity, natural gas, and pipelines.
This diversification helps further reduce risk and ensures steady cash flow, even in uncertain economic environments. Furthermore, its history of weathering market cycles makes it a great choice for conservative investors looking for a long-term investment that can provide stable returns.
So, if you’re looking for a reliable TSX stock that offers both an attractive yield and consistent dividend growth, Canadian Utilities is undoubtedly one of the best investments to buy today.
High-quality bank stocks make excellent passive-income generators
In addition to Canadian Utilities, another top TSX dividend stock to buy now is Bank of Nova Scotia (TSX: BNS).
Bank of Nova Scotia, or Scotiabank, is one of Canada’s largest and most well-established banks.
It has a long history of delivering strong earnings and rewarding shareholders with consistent dividend increases. As one of the country’s Big Five banks, Scotiabank unsurprisingly has a solid balance sheet, diversified revenue streams, and a strong presence in both domestic and international markets.
Currently, Scotiabank offers a dividend yield of roughly 5.9%, making it one of the highest-yielding banks in Canada. Plus, in addition to its compelling dividend yield, Scotiabank has increased its dividend by more than 17.5% in just the last five years.
While banks have faced headwinds due to economic uncertainty and higher interest rates, Scotiabank remains resilient. The company continues to expand its presence in key international markets and has been focusing on improving efficiency and reducing costs to drive profitability in the long run.
This significant geographic diversification helps Scotiabank mitigate risks tied to the Canadian economy and provides additional avenues for revenue growth. In fact, more than half of its earnings are generated outside of Canada.
So, if you’re looking for a reliable TSX stock that pays an attractive dividend and will continue to increase its payouts, Scotiabank is certainly one of the best to buy now.
