The Canadian stock market is currently going through a bullish rally. In fact, the S&P/TSX Composite Index is hovering near new all-time highs. As of this writing, the Canadian benchmark index is up by 25% from its 52-week low. Investors wondering about which stocks to buy in the current market environment are concerned about investing in stocks trading at new all-time highs.
In times like these, when you’re unsure how things might change in a week or so, it might be a good idea to allocate some of your money to safer investments. Think good valuation, decent returns, and solid long-term growth potential. Meaningful and reliable dividends in the mix will make the returns even better.
I will discuss two TSX dividend stocks that can be excellent buy-and-forget holdings to consider for this purpose.
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Fortis
Fortis Inc. (TSX: FTS) is a darling stock for many Canadian investors seeking passive income. The $32.3 billion market-cap utility holdings company owns and operates several electricity and natural gas utility businesses in Canada, the US, and the Caribbean. Boasting over 3.4 million customers for utilities, it generates revenue through an essential service. That fact makes it a defensive holding itself. To make things better, its money comes from long-term contracted assets in highly rate-regulated markets.
All these factors mean Fortis stock can generate predictable and stable cash flows. When it has predictable revenue, the company can comfortably fund capital programs and increase dividends. Fortis stock has increased payouts for over 50 years, making it one of two TSX stocks to do so. As of this writing, it trades for $64.43 per share and boasts a 3.8% dividend yield.
Pembina Pipeline
Pembina Pipeline Corp. (TSX: PPL) is another excellent holding for investors seeking passive income. The $29.2 billion market capitalization midstream company, headquartered in Calgary, has an extensive network of energy infrastructure. It services the North American energy industry, providing the infrastructure necessary for transporting commodities across the region. Besides pipelines, it has processing facilities and export terminals that make it a top pick for investors bullish on the energy industry.
The company’s performance is solid, with its first-quarter report for fiscal 2025 seeing it report a 58% top-line revenue growth. While its bottom-line growth stood at 10%, there is more room for it to grow. As of this writing, PPL stock trades for $50.34 per share, paying investors $0.71 per share each quarter, translating to a 5.6% dividend yield.
Foolish takeaway
Fortis is a reliable dividend stock boasting a dividend-growth streak spanning over half a century. It can pay dividends regularly and keep increasing its quarterly payouts year in and year out. That makes it an attractive investment to consider, especially to keep pace and beat inflation with passive income.
Pembina Pipeline might not have the same dividend-growth streak, but it isn’t something to shrug aside. The monthly dividend-paying stock is increasing payouts and boasts solid fundamentals, and its long-term contracts make it reasonable to assume that it can keep increasing dividends for years.
Dividend-seeking investors can consider allocating at least some of their investment capital to these two TSX dividend giants.
