One of the best things about investing in dividend stocks is collecting that juicy income. Investors can take comfort knowing the right picks can ensure those dividends are safe while still offering growth.
For those investors looking to ensure those dividends are safe, here is a look at some great options for any portfolio.
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A defensive moat is a must
To help ensure dividends are safe, starting with a defensive stock is a smart move. One standout in this area is Fortis (TSX: FTS).
Fortis is a utility stock. In fact, it’s one of the largest utility stocks in North America, with 10 operating regions serving Canada, the U.S., and the Caribbean.
Those segments provide a reliable revenue stream that is backed by regulated long-term contracts, often spanning decades in duration. Even better, that reliable revenue stream allows Fortis to invest in growth initiatives while also paying out a generous quarterly dividend.
As of the time of writing, Fortis’ dividend pays out a respectable 3.5% yield. Even better, Fortis has raised that dividend for over 50 consecutive years, making it a powerful signal for investors that those dividends are safe for the future.
Here’s another top-pick for any portfolio
For long-term safety, Canada’s big banks are another strong option to consider. The big banks offer stable results from a mature domestic market, handsome dividend growth, and an intriguing path to growth from international markets.
And that big bank stock to consider right now is Bank of Nova Scotia (TSX: BNS). Scotiabank is the most international of the big banks, and that focus is an opportunity for investors to seek out huge growth potential in addition to a juicy income.
Recently, Scotiabank shifted focus from Latin America to more mature markets in North America. Still, the growth persists. Over the trailing 12-month period, the bank has seen growth of over 25%.
Turning to income, Scotiabank stands out. As of the time of writing, the bank offers a tasty 4.9% yield, making it the highest paying dividends among its big bank peers.
Scotiabank also has an established cadence of providing annual upticks to that dividend, making it a solid option for both new and seasoned investors alike.
Power-up your portfolio
One final option for investors looking at options to ensure dividends are safe over the longer term is Enbridge (TSX: ENB). Enbridge is one of the largest energy infrastructure companies on the continent.
The company is best known for its lucrative pipeline business, and for good reason. The pipeline operation, which includes both crude and natural gas, is highly defensive. Each day, Enbridge hauls massive amounts of both across its vast network, generating cash like a toll road.
Even more impressive is the fact that Enbridge has an ample project backlog measured in the billions to expand that network.
But that’s not all.
The company also boasts a growing renewable energy business as well as a natural gas utility. Both are defensive, backed by long-term regulated contracts that generate a reliable, recurring revenue stream.
That revenue stream fuels growth and supports one of the best dividends on the market.
As of the time of writing, that dividend amounts to a tasty 5.4%. And like Scotiabank and Fortis, Enbridge continues to provide annual upticks to that dividend.
In fact, Enbridge has amassed three consecutive decades of annual increases and plans to continue that cadence. This not only reinforces the “your dividends are safe” argument but also makes Enbridge a top buy-and-forget favourite.
Your dividends are safe, and income is growing.
No stock is risk-free, even the most defensive, but the trio above can offer reliable, recurring revenue, a juicy income and long-term peace of mind.
One or all of the above would do well in any long-term well-diversified portfolio.
