One of the simplest ways to build long-term wealth is by investing in high-quality dividend stocks.
Dividend stocks are some of the best long-term investments you can buy because they tend to be well-established businesses with stable earnings, proven track records, and the financial strength to generate consistent cash flow year after year.
That’s not just ideal for the potential gains you can make, but it also means less volatility, more reliability, and an easy way to make your money work even when you’re not.
The beauty of dividend investing is that it turns your hard-earned capital into income for you. Every payout you receive can be reinvested in more shares, creating a snowball effect that compounds your income over time. That’s why it’s one of the most powerful ways to grow your portfolio over the long haul.
It’s worth noting, though, that not all dividend stocks are created equal. For example, stocks with ultra-high yields can often be risky, since a high yield often signals financial distress or unsustainable payouts.
Therefore, the best approach is to focus on dividend growth stocks that consistently grow their payouts as their operations expand and their earnings increase. That’s how you not only build long-term income streams but also ensure that you outpace inflation and steadily increase your total returns.
So, if you’re looking for Canadian dividend stocks that can help your money grow while you sit back and relax, here are three of the best to buy and hold today.
Source: Getty Images
One of the top dividend stocks on the TSX
If you’re looking to put your money to work with a high-quality dividend stock, there’s no question that one of the best on the TSX is Enbridge (TSX:ENB).
Enbridge is one of the best for several reasons. Its pipeline operations transport about 30% of the crude oil produced in North America and 20% of the natural gas consumed in the United States, making its business essential to the continent’s economy.
It also has a strong competitive advantage in an industry with extremely high barriers to entry. On top of that, Enbridge owns long-life assets that generate billions of dollars in predictable cash flow each year. That steady cash flow allows the company to consistently increase the money it returns to investors while still investing in new projects and long-term growth.
Not only does Enbridge offer a dividend yield of more than 5.7% today, but it has also increased that payout by more than 16% over the last five years. And when you consider that it’s increased its dividend for 30 consecutive years, it’s proven it can deliver steady, reliable returns year after year.
A top Canadian telecom stock
In addition to Enbridge, telecom stocks are a cornerstone of most dividend portfolios, and for good reason. Like pipeline stocks, they provide essential services, generate tonnes of recurring revenue, and operate in an industry with high barriers to entry.
That’s why one of the best dividend stocks to consider if you’re looking to put your capital to work is Telus (TSX:T).
Telus not only offers an incredibly compelling dividend yield of 7.9% today, but it’s also increased its dividend by over 34% in just the last five years, showing why it’s one of the top dividend growth stocks on the TSX.
One of the most reliable dividend stocks in Canada
Although Telus and Enbridge are two of the best and most reliable dividend stocks that Canadian investors can buy today, one stock that’s even more defensive is Emera (TSX:EMA)
Emera operates a portfolio of electric and gas utilities across Canada, the U.S., and the Caribbean. Therefore, because it provides essential services and because its operations are regulated by the government, Emera’s future revenue and earnings are highly predictable.
It’s also one of the lowest volatility stocks on the TSX, which is exactly what you want out of a long-term dividend stock.
And with steady demand growth driven by population increases, rising energy consumption, and the ongoing transition toward greener energy, Emera is well-positioned to keep growing its earnings and dividend for many years to come.
Therefore, while the stock offers a yield of more than 4.2%, it’s undoubtedly one of the best dividend stocks to buy now.
