When market volatility hits, it provides a unique opportunity for investors to pick up some great stocks at a discounted price. That includes some of the best Canadian dividend stocks on the market that I’m currently watching.
Here’s a look at those Canadian dividend stocks that I’m waiting to buy.
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Start with the King of Canadian dividend stocks
When it comes to Canadian dividend stocks to consider buying, Canadian Utilities (TSX: CU) is in a league of its own. The utility stock has the longest streak of annual dividend increases in Canada, with a whopping 53 years.
This makes Canadian utilities one of just two stocks on the market that can be classed as a Dividend King. Prospective investors should note that Canadian Utilities has plans to continue that cadence.
This makes the stock a great option for long-term investors looking for a buy-and-forget option. Part of the reason for that stability comes down to the lucrative business model that utilities follow.
In short, Canadian Utilities provides a necessary service for which it is compensated. The terms of that arrangement are set out in regulated contracts, which span decades.
It may not be the most exciting investment on the market, but it is stable and growing, which is welcome during volatile times.
The result is that Canadian Utilities generates a stable and recurring revenue stream that leaves room for both growth and income-earning potential. As of the time of writing, Canadian Utilities offers a quarterly dividend that carries a yield of 5.00%.
This means that a $2,000 investment in Canadian Utilities right now will produce an income of just over $150. That’s enough for buy-and-forget investors to generate a few shares each year through reinvestments.
Bank on long-term growth
Canada’s big banks are always among the best long-term options to consider, and when it comes to Canadian dividend stocks, the banks are always on that shortlist.
Canadian Imperial Bank of Commerce (TSX: CM) is one of the smaller of the big bank stocks, yet it has plenty of appeal for prospective investors.
The banks are known for generating a stable revenue stream that leaves room for growth and a tasty dividend. In the case of CIBC, that growth comes primarily from the mature (and stable) domestic market.
The volatility that we’ve seen this year has pushed CIBC’s stock lower. As a result, the bank shows a nearly 13% decline year to date. This makes it an excellent time to scoop up this stellar Canadian dividend pick at a discounted rate.
Turning to dividends, CIBC’s quarterly dividend pays out a yield of 4.81%. This means that a $3,000 investment in the bank will earn just shy of $150. Again, that’s not enough to retire on, but it will provide some annual growth through reinvested dividends.
And like Canadian Utilities, CIBC has an established tradition of providing investors with a tasty annual uptick to that dividend.
Final thoughts: Will you buy these Canadian dividend stocks?
Both Canadian Utilities and CIBC can offer investors long-term growth and a tasty income. While no stock is without risk, both options mentioned above can provide significant defensive appeal for long-term investors.
In my opinion, one or both of the above should be core holdings in any well-diversified portfolio.
Buy them, hold them, and watch them (and your future income) grow.
