Every investor has their own unique set of criteria in terms of what they look for in dividend stocks. Some are simply yield-seekers. The higher the yield, the better. Others want stability and look for companies with the most rock-solid balance sheets. And still others look more for dividend growth over time than current yield. To each their own.
That said, the three Canadian dividend stocks I’m going to discuss in this piece are all among the best options for investors looking for an appropriate mix of all three key variables.
Let’s dive in!
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Fortis
It should be no surprise to most readers that Fortis (TSX:FTS) is the first company on my list of dividend stocks investors should consider right now.
For one, as a leading North American utility player, Fortis benefits from some very strong tailwinds in this sector. Surging demand for electricity, at least in part due to the rise of artificial intelligence, should drive continued strong demand dynamics down the road. Accordingly, Fortis’s more than five-decade-long track record of raising its dividend should remain intact.
With a current dividend yield of 3.5% and a solid balance sheet with plenty of room for further dividend hikes down the line, this is a stock I think all long-term investors will at least want to look at right now.
Enbridge
Another top energy-related name that’s been atop my watch list in recent months is Enbridge (TSX:ENB).
Shares of the Canadian energy infrastructure company have been on a tear of late, up more than 22% over the past year and more than 45% over the past five years at the time of writing.
This move appears to be related to both the search for yield from investors and the search for stability. As energy prices have stabilized, investors have looked for the best ways to play this sector. And from a commodity price risk standpoint, as well as the long-term view that North American energy independence will remain a top priority, Enbridge is one of the best ways to play this trend.
With a balance sheet that’s improving as the company continues to pay down debt while paying a juicy 5.7% dividend yield, this is a stock that dividend investors won’t want to miss, particularly on any significant pullbacks moving forward.
Suncor
Last, but certainly not least on this list of dividend stocks for investors to consider in August is Suncor (TSX:SU).
The oil sands giant has been an underperformer on a relative basis of late, with its share price actually down over the course of the past 12 months. However, over the past five years, shares of Suncor stock have more than doubled. That provides an interesting backdrop for investors, given this stock’s recent performance.
I’m of the view that Suncor’s 4.2% dividend yield is among the best in the energy sector. For those who think we’re going to need a lot more energy over the long term to power our economic growth, Suncor stands as a top way to play this trend.
Yes, geopolitical dynamics continue to change, and there’s nothing easy about investing in the energy sector. But for those who are under-exposed to this sector, Suncor is one of the top ways I’d think about playing this space right now.
