For Canadian investors looking for top dividend stocks to invest in, there are a plethora of great options to choose from. Of course, the TSX is resource and financials-heavy, so investors who buy any sort of index fund or create a well-diversified portfolio of Canadian stocks are likely to have some exposure to the following two dividend all-stars I’ve included on this list. But there are plenty of reasons to own these stocks other than their yields and diversification upside, which I’m going to get into here.
Let’s dive into why these top Canadian dividend all-stars are worth buying and holding for the long term.
Image source: Getty Images
Fortis
Canadian utility giant Fortis (TSX:FTS) is a dividend all-star if there ever was one.
The Newfoundland-based company has a tremendous track record of dividend growth, providing investors who put their capital to work in this company decades ago with more dividend income per year today than their initial investment. Few companies can lay claim to such a status.
These returns are a result of decades of annual dividend increases, with Fortis having raised its distribution for 51 consecutive years. That’s rarified air and makes the company one of the few dividend knights Canada has to offer.
For long-term investors looking for a true bond proxy (with a dividend yield of 3.7%), this is a top option I think is worth buying right now.
Toronto-Dominion Bank
Moving toward the financials sector, Toronto-Dominion Bank (TSX:TD) is a top-tier option as far as Big Six banks are concerned.
The banking giant is not only one of the largest retail and commercial banks in Canada but has a massive retail footprint in the United States. Thus, this is a company that many investors may think of more as an American bank than a Canadian bank, given the fact that TD actually has more retail banking locations south of the border than domestically.
That level of geographic diversification is important for Canadian investors who may be over-indexed to Canada. The U.S. market has traditionally provided more in the way of growth, particularly for financial institutions. The fact that TD has diversified into the U.S. market (and done so with big deals in the years following the great financial crisis).
TD has seen strong earnings growth in recent quarters, despite concerns around domestic and international slowing in lending activity and concerns around the company’s commercial loan book. With a dividend yield of 4.7%, TD makes a great addition to a portfolio banking on long-term dividend growth as well.
