If you are new to investing, a persistent stock market sell-off can be really intimidating. Psychologists have found that the emotions related to a capital loss are significantly more profound than those that come from a gain. Humans are wired to protect themselves from pain.
Unfortunately, some pain is a part of the investing process. Every investor will have losses at some point. Markets do not go up endlessly. They do tend to go up more than they go down, but bear markets are still a fact of life.
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Stock market losses are inevitable, but dividends can help buffer the pain
Fortunately, you can avoid some of this pain by diversifying your portfolio and keeping dry powder to invest when the stock market dips. And some stocks tend to be more resilient through market downturns than others.
Many investors like dividend stocks during drawdowns because it helps ensure some sort of tangible return. Dividends can help offset the volatility of the market. Psychologically, it can be a comfort to see dividends hit your account when the market is struggling.
Fortis: A top Canadian dividend stock for safety
Fortis (TSX: FTS) is about as close as you come to a bond in the form of a dividend stock. Investors run to its safe and steady utility business during times of distress. Its stock is up 8% in 2025.
With a market cap of $32 billion, it is one of Canada’s largest pure-play regulated utilities. It operates 10 transmission/distribution utilities across North America. In its core jurisdictions, it operates a basic monopoly on power and gas transmission.
Fortis provides safe and reliable service. In return, the utility company collects a baseline fee for the energy resources that run through its network. Likewise, it earns a regulated return on the infrastructure capital it spends.
This dividend stock is as safe as they come. Fortis has a 51-year history of consecutively increasing its annual dividend. Right now, FTS yields 3.9%. I would not call it cheap today. However, if you want a safe place to put your capital (with a decent yield), it is a good place to invest.
BSR REIT: A way to hedge a weak Canadian dollar
If you are worried about a declining Canadian dollar, BSR Real Estate Investment Trust (TSX:HOM.UN) could be a dividend stock for you. Despite being listed on the TSX, BSR operates entirely in the United States (primarily Texas).
This $650 million company operates garden-style communities that offer mid-level rental affordability. The REIT operates in some of the fastest growing regions in the country. Over the long term, this dynamic has supported consistently high occupancy and strong rental rate growth.
BSR just announced plans to sell off a large piece of its portfolio. The company trades at a steep discount to its private market value. The deal demonstrated that its assets are worth considerably more than its stock is given credit for. BSR has plans to use the proceeds to further upgrade its portfolio in top growth markets.
This dividend stock yields 4.5% right now. It increased its distribution last year. HOM.UN pays its distribution monthly if you like to see your passive income come in regularly.
This stock still trades at a steep discount. In the past, management has opportunistically bought back stock aggressively. BSR is an intriguing value and income play for investors open to a little bit more risk than Fortis stock.
