Diversifying your portfolio with a broad pick of stocks from across the market remains one of the best ways to offset market volatility. And there’s no shortage of great Canadian dividend stocks to help make that easier.
Here’s a look at three top Canadian dividend stocks that should be core to any well-diversified portfolio.
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Start with some defensive appeal
When market volatility hits, adding one or more defensive stocks to one segment can help to offset drops in others. And that’s why one of the first Canadian dividend stocks that investors should consider is Canadian Utilities (TSX: CU).
Canadian Utilities is one of the largest utility stocks in Canada. That reliable and recurring revenue model from the regulated utility business provides one of the best defensive moats on the market.
It also provides a predictable revenue stream that allows Canadian Utilities to invest in growth while paying out a handsome dividend.
That growth is modest but steady, with investments in the grid and renewables.
Turning to dividends, Canadian Utilities’ quarterly dividend currently works out to an impressive 4.4% yield. But that’s not even the best part.
Canadian Utilities holds the longest streak among Canadian dividend stocks in Canada. As of the time of writing, the company has bumped its dividend for 53 consecutive years without fail.
That fact alone makes this one of the must-have Canadian dividend stocks for any portfolio.
Add in a mix of growth and income
It would be hard to mention Canadian dividend stocks and not mention Enbridge (TSX: ENB). Enbridge is one of the largest energy infrastructure companies on the planet.
The company generates the bulk of its revenue from its pipeline business, which includes both natural gas and crude elements. The segment operates like a toll road, generating passive income that leaves room for growth and a robust dividend.
Beyond the pipeline business, Enbridge also generates revenue from its natural gas utility and renewable energy businesses.
Turning to dividends, Enbridge offers an attractive 5.6% yield. The quarterly dividend is among the best on the market, and the company boasts an impressive 30-year streak of annual increases.
Go full tilt on income
When it comes to selecting income-producing stocks, REITs represent some of the absolute best options for investors. Not only do they provide a recurring (often monthly) income stream, but they also offer significant growth and defensive appeal.
One REIT for investors looking at Canadian dividend stocks to consider is Slate Grocery REIT (TSX: SGR.UN).
Slate is a U.S.-anchored grocery REIT with a portfolio of over 110 sites across metro areas of the U.S. This provides both an opportunity for stable income generation as well as defensive appeal.
Also worth noting is that the REITs’ tenant base comprises some of the largest names in the sector. This provides a defensive layer that stacks on top of an already impressive business model.
Additionally, prospective investors should note that Slate’s properties often include adjoining restaurants, banks, doctors’ offices, and other businesses. This provides yet another complementary revenue stream.
The end result is a recurring, stable, and growing revenue stream that allows Slate to pay out a very robust monthly distribution. As of the time of writing, that yield works out to a generous 8.1%. That makes it one of the best returns on the market.
Which Canadian dividend stocks are you investing in?
The trio of options noted above provide investors with a good mix of income, growth, and defensive appeal. This makes them prime candidates for any investor seeking one or more Canadian dividend stocks to add to any portfolio.
Prospective investors considering these three investments should also note that reinvesting those dividends can provide ample growth over the long term.
In short, buy them, hold them, and watch your income grow.
