It’s always a good idea to own a few solid dividend stocks in your portfolio. That is especially true when stock markets are soaring to all-time highs and valuations seem stretched. The market could be due for a pullback. It’s nice to have some stocks that can earn income if the market hits a downturn.
If you are looking for some great Canadian dividend stocks, here are five for any portfolio.
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A top utility stock for dividend growth
Fortis (TSX: FTS) is a quintessential Canadian dividend stock. The company has raised its dividend for 52 consecutive years. It’s an incredible track record that speaks to the quality of its business and assets.
Fortis has a rock-solid utility business that is nearly 100% regulated. Electric and gas transmission and distribution assets are essential to society, so demand is predictable.
Fortis has a $28 billion investment plan that should help grow earnings and its distribution by a 4–6% annual rate. FTS stock yields 3.6% today, but that will grow as it keeps raising its dividend.
Canada’s largest energy stock
Canadian Natural Resources (TSX: CNQ) is another great Canadian dividend growth stock. It has grown its dividend by a 21% compounded annual growth rate (CAGR) over 25 years. For an energy stock, it is an incredible record of consistency.
Canadian Natural’s stock has struggled this year given that energy prices have been depressed. CNQ trades with an attractive 5.3% dividend yield.
Even with low energy prices, it has still delivered 14% earnings per share growth so far this year. Its a very high quality business you don’t want to pass on just because it is an energy stock.
A top Canadian bank for income growth
With a market cap of $290 billion, Royal Bank of Canada (TSX: RY) is Canada’s largest stock. It also happens to be one of Canada’s best banks. It has taken a dominant position as a top retail and commercial bank.
RY stock has raised its dividend by a 7% CAGR for over 20 years. Royal is an incredibly well-managed bank.
The Big Six bank has avoided a lot of the mistakes that other major peers have made. Its quality comes at a higher valuation and a lower dividend yield (3.2%), but it’s worth owning over the long run.
A real estate stock for monthly dividends
Granite Real Estate Investment Trust (TSX: GRT.UN) is a great stock for monthly dividends. This real estate stock owns a high-quality portfolio of institutional grade industrial, manufacturing, and logistics properties.
It has long-term leases (over five years) and strong 97% occupancy. Solid rental rate growth is supporting 8% cash flow per unit growth so far this year.
Yet, Granite’s stock has hardly made any move this year. Its stock is cheap, and it has an attractive 4.4% yield. Granite has raised its dividend for 15 consecutive years.
A diversified industrials business for monthly income
Exchange Income Corporation (TSX: EIF) is another great Canadian dividend stock for monthly income. EIF stock has raised its dividend 17 times over the past 20 years. It just raised its dividend again by 5% and has a yield of 3.4%.
The company has become an aviation leader across Canada’s north. Its recent acquisition of Canadian North airline certainly solidifies that. While aerospace is its largest business, its industrial segment in matting has performed very well this year as well. For the first nine months, revenues are up 19% and earnings per share are up 15%.
For an attractive mix of income and growth, Exchange is a great stock to cap off a dividend portfolio. Own it along with this great mix of dividend stocks and you should get a nice combination of capital appreciation and dividends over time.
