Is your portfolio diversified with income-producing stocks? Finding that perfect mix of dividend-paying stocks can make all the difference in retiring with a solid income stream versus needing to work a few more years.
Fortunately, there’s more than a few dividend stocks to load up on for long-term investors to meet that goal.
Here’s a look at two solid dividend stocks that are in my portfolio that I will never sell, and neither should you.
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This becomes your investment baseline
The investments in your portfolio are like a team working together to build your income-producing future. And like all teams, you need a solid back-line defence.
That’s where Fortis (TSX: FTS) comes in as the first of two key dividend stocks to buy and hold forever.
Fortis is a utility stock. That means that the company generates a recurring revenue stream that is backed by long-term regulated contracts. Often, those contracts can span decades, which makes the stock the ultimate option for stability.
There’s a utility stock stereotype shared by some investors. That view is that utilities like Fortis invest little to nothing in growth.
The reason for that belief is that, because of the reliable revenue stream and juicy dividends on offer, there is little incentive, or the funds to invest in growth.
Fortunately, that’s not the case with Fortis, which has a massive $25 billion plan for capital expenditures running through 2030. That plan includes grid modernization, renewable energy projects, and new transmission initiatives.
But the main reason investors should consider Fortis right now is for its dividend. The company pays out a handsome quarterly dividend. As of the time of writing, Fortis offers a yield of 3.5%.
Adding to that appeal is the fact that Fortis has provided annual upticks to that dividend going back over 50 years without fail. That’s an incredible amount of time and puts Fortis in elite company as one of only two Dividend Kings in Canada.
Prospective investors considering Fortis as one of the dividend stocks to buy and hold forever can kickstart their portfolios with a $6,000 investment. That’s enough to generate a few shares each year through reinvestments without adding any additional funds.
Build out a solid growth and income stream
Another one of the dividend stocks for investors to buy and hold forever is Enbridge (TSX: ENB). Enbridge is an energy infrastructure giant, best known for its lucrative pipeline business.
The company also operates a renewable energy business with facilities in North America and Europe, as well as operating one of the largest natural gas utilities in North America.
Enbridge’s pipeline business, which comprises both crude and natural gas segments, operates like a toll road. The segment generates a recurring (and growing) revenue stream for Enbridge. To say that this makes Enbridge one of the most defensive picks on the market would be an understatement.
Perhaps, more importantly, that revenue stream is ample enough for Enbridge to invest in growth while paying out one of the best dividends on the market.
As of the time of writing, Enbridge pays out a generous 5.5% yield. And like Fortis, Enbridge has an established history of providing annual bumps to that dividend going back three decades.
Prospective investors seeking an income-producing investment in Enbridge can start with a $5,000 initial outlay. That’s enough to generate a share from reinvestments alone each quarter.
What are your dividend stocks to invest in?
Enbridge and Fortis offer a great mix of growth, defensive appeal, and income-generating capabilities. This can serve as a key anchor to any portfolio, especially during times of volatility.
One or both stocks would do well as part of any well-diversified portfolio.
Buy them, hold them, and watch your portfolio (and future income) grow.
