Stock market investing offers you plenty of avenues to explore so you can put your money to work and make more. One of the strategies Canadian investors love relying on to get amazing long-term returns is dividend investing. By buying and holding the best dividend stocks in your self-directed investment portfolio, you can create an excellent passive-income stream.
When you are in the wealth-building phase, you can reinvest the dividends you earn to buy more shares. This way, you can accelerate wealth creation through the power of compounding and set yourself up for a much more comfortable retirement.
The key is to identify the right investments and build a well-balanced portfolio that can continue delivering substantial returns for decades. Against this backdrop, here are two TSX stocks that I find ideal right now.
Bank of Nova Scotia
Bank of Nova Scotia (TSX:BNS) is one of the Big Six Canadian banks and a regular holding for many investors. The $109.46 billion market-cap giant provides financial products and services across Canada and several international markets. It is one of the top dividend-paying stocks on the TSX, with uninterrupted quarterly payments to investors that began in 1833.
Belonging to a strong banking sector, the company’s performance has been excellent of late. Its International Banking, Global Banking and Markets, and Global Wealth Management segments saw significant growth in its recent quarter. The company’s continued expansion in the North American market lowers the risk, alongside scaling down Latin American operations.
As of this writing, Scotiabank stock trades for $88.16 per share and boasts a 4.99% dividend yield that you can lock into your self-directed portfolio today.
Enbridge
Enbridge (TSX:ENB) is another favourite for many dividend-seeking investors, and for good reason. The $147.39 billion market-cap diversified energy company is headquartered in Calgary and offers a lot of high-quality exposure to its investors. The company owns and operates an extensive portfolio of midstream assets transporting hydrocarbons throughout North America. Its strength in the traditional energy sector makes it attractive enough, but it is foraying into several other areas.
Enbridge has a growing portfolio of renewable energy assets, setting itself up for a stronger future once fossil fuels are phased out. Enbridge also owns and operates one of Canada’s largest regulated natural gas utility businesses, adding a sense of stability and predictable cash flows that inspire confidence among investors.
It comes as no surprise that it has increased dividends for over 30 consecutive years and looks well-positioned to continue that streak. As of this writing, ENB stock trades for $67.58 per share and boasts a 5.58% dividend yield.
Foolish takeaway
It is important to remember that you must always diversify your investment capital. Stock market investing is inherently risky. Putting all your eggs in one or two baskets can be very bad if the underlying business or market conditions result in significant losses. By diversifying, you can mitigate potential losses to protect your capital.
Scotiabank stock and Enbridge stock have the kind of long-term track records that make the two staples in many investor portfolios. If you have $7,000 to invest right now, I would advise that you consider allocating at least a small portion of it to BNS stock and ENB stock.
