When some investors think of the Canadian stock market, energy and resource companies may be the first that come to mind. Canada does have a very resource-centric economy, and as such, this is the sector that often gets the closest look from international investors looking to diversify into TSX-traded stocks.
That said, there are a number of other high-quality blue-chip stocks I think are worth considering. In my view, the following two names are among the best options for investors looking for solid total returns over the long haul. These are companies that not only provide solid growth upside over the long term, but are also among the top dividend stocks I’ve got my eye on right now.
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Fortis
I continue to hammer the table on utility giant Fortis (TSX: FTS) as a great long-term investment for those looking for rock-solid total returns.
Given the company’s core business model of providing essentials to its core residential and commercial customer base (no one can go without lights and heat for very long), Fortis continues to earn very stable cash flows that it returns to investors over time.
Aside from being a classic defensive stock for investor portfolios, Fortis also has the backing of some very strong fundamentals investors can rely on for continued revenue and earnings growth. With the company’s earnings per share rising to $1.00 from $0.93 in the same quarter the year prior, and revenue also increasing by a similar amount, this is a company which should provide roughly 10% overall growth investors can rely on.
Over time, Fortis has delivered dividend growth in the 6% range for long-term investors, with an impressive 50-year streak of consecutive dividend hikes. I’d expect that track record to continue, making Fortis’s current dividend yield of 3.8% much more impressive on an absolute basis.
Brookfield Asset Management
Another top blue-chip Canadian stock I think can get overlooked relative to other premium names is Brookfield Asset Management (TSX: BAM).
The company’s business model is a bit more diverse than many TSX-listed stocks. With a portfolio of global alternative assets in a number of in-demand industries, Brookfield has benefited from the rather robust global growth trends we’ve seen play out since the Great Financial Crisis.
Of course, there’s always the potential that another recession will be headed our way, and that could impact the company’s business. However, Brookfield’s historically impressive stability and its broad asset base provide some cushion and diversification for investors seeking such attributes.
With a current dividend yield of 3.2%, Brookfield is no slouch in this department either. And with a market capitalization of more than $90 billion and margins of 57% (up from 54% the year prior), this is a stock I think investors can buy and hold with confidence in this current market environment.
