The best dividend stocks in the market tend to be those investors can reliably bank on for consistent dividend payments long term, and preferably rising dividends over time. Unlike most fixed income products such as bonds, the upside of owning dividend-paying equities is not only the capital appreciation upside these stocks can provide, but the dividend growth they often provide as well.
On that note, there are a number of high-quality blue-chip Canadian dividend stocks investors may want to consider in this current environment. Indeed, because valuations haven’t skyrocketed in Canada to the same degree as other markets, there’s not only a dividend argument to be made for holding these stocks, but a valuation and defensive thesis as well.
Without further ado, let’s dive in!
Suncor
In the Canadian energy sector, Suncor (TSX:SU) continues to be one of my preferable ways to play long-term growth in this space.
The Western Canadian (primarily) oil sands producer has seen strong growth of late, as investors look for ways to gain exposure to what have been rather robust energy prices (and demand) of late.
No matter where you stand on the inflation or tariff discussion, Suncor does appear to be well-positioned to weather any sort of macro headwinds that may come about. That’s partly because this is one of the most efficient Western Canadian crude producers, with a low breakeven price per barrel that can sustain operations even during difficult times.
For those looking for a long-term energy holding worth buying now, Suncor would be my pick.
Toronto-Dominion Bank
As far as Canada’s largest banks are concerned, Toronto-Dominion Bank (TSX:TD) continues to be one of my top picks in this space for those looking for not only up-front yield, but dividend growth over time.
TD’s impressive footprint not only in Canada, but in the U.S. and other international markets positions the company well for growth as the banking sector continues to see headwinds prevail.
We’ll have to see if liquidity issues ultimately hit TD, or if the bank will be relatively insulated from some of the credit issues we’ve seen pop up among some regional lenders in the U.S. But for now, the company’s loan portfolio and the strength of its balance sheet provide some comfort for those looking for a solid mix of capital appreciation upside and dividend yield.
With strong historical growth and a divided yield of 3.7% at the time of writing, this is among my top picks in this sector right now.
Fortis
I can’t finish this piece without touching on my favourite Canadian dividend stock of them all – Fortis (TSX:FTS).
This leading Canadian utilities company has seen robust growth in recent years, as investors look for ways to play surging demand for electricity and natural gas over time.
In order for the North American economy to be able to meet what’s expected to be skyrocketing demand for utilities services, companies like Fortis will undoubtedly have the upper hand. With an entrenched customer base in core markets and pricing power during times of investment, Fortis can sustainably grow its dividend over time while managing its capital expenditures.
For other companies spending heavily on the forefront of AI, that CapEx picture looks a lot different. Thus, for those looking for long-term dividend growth (and a company that’s raised its distribution for more than five decades straight), Fortis and its 3.6% dividend yield are worth buying now.
