There’s no question that when it comes to building real long-term wealth, the best strategies involve owning high-quality dividend stocks.
Even if you’re a younger investor who’s focused more on growth, high-quality dividend stocks can quietly compound your money in the background for years, giving you a mix of steady income and capital appreciation that can add up significantly over time.
And while plenty of stocks offer dividends, not all dividend stocks are created equal. For example, some stocks offer significant dividend yields that make them look attractive on the surface but may not be sustainable over the long haul. Meanwhile, other stocks might pay an attractive and sustainable dividend right now but have very little growth potential ahead.
That’s why the best dividend stocks to buy are the companies that offer a solid mix of everything. They pay a respectable yield, their dividends are actually sustainable, and they still have years of growth ahead. That’s what separates average dividend stocks from businesses you’ll want to own in your portfolio for years to come.
So, if you’re looking for high-quality dividend stocks to buy now and hold for the long haul, here are three rock-solid choices to consider adding to your portfolio today.
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Two top Canadian REITs
If you’re looking for high-quality dividend stocks to buy and hold for years, one of the first places to look is the real estate sector, where tons of real estate investment trusts (REITs) make high-quality dividend stocks.
In fact, two of the best and most reliable dividend stocks in Canada are in the real estate sector, Granite REIT (TSX: GRT.UN) and CT REIT (TSX: CRT.UN).
Granite is one of the best dividend stocks to buy and hold for the long haul, especially in this environment, while it trades at a compelling valuation.
As an industrial REIT, Granite has already seen its growth potential rapidly increase as demand for industrial properties and warehouse space continues to surge.
In fact, Granite isn’t just building new developments to grow its business; it’s been seeing significant increases in rental revenue as leases turn over as well.
And that growth has contributed directly to Granite’s dividend, consistently increasing year over year and becoming more sustainable.
In fact, over the last six years, the REIT has increased its monthly dividend by over 21%, while its payout ratio of adjusted funds from operations (AFFO) has actually declined from 81% to 65% over that stretch.
So, with Granite offering a current yield of 4.4%, having an ultra-reliable dividend and trading undervalued, it’s easily one of the best dividend stocks to buy now.
Meanwhile, CT REIT is a retail REIT whose largest tenant and majority owner is Canada Tire. This unique relationship makes CT REIT incredibly reliable because Canadian Tire is one of the best-known retailers in the country, and its long-term growth is directly aligned with CT REIT.
In fact, the reliable revenue CT REIT generates from Canadian Tire has made it an incredibly safe retail REIT. During the pandemic, for example, when many retail REITs struggled, CT REIT not only weathered the storm, but it actually continued to grow.
In fact, since going public in 2014, CT REIT hasn’t had a single year where its revenue, FFO, and dividend didn’t all increase.
So, with CT REIT offering a current yield of 5.9% and having a payout ratio of just 75% of its AFFO, it’s easily one of the most dependable stocks to buy now.
One of the best dividend-growth stocks to buy right now
In addition to those two REITs, another high-quality stock to consider buying right now is goeasy (TSX: GSY).
goeasy is known more as a growth stock due to the incredible performance it’s had in recent years, but it’s also a high-quality dividend stock.
Therefore, while the stock is selling off due to a change in the CEO and a quarter of higher bad debt expenses, it’s easily one of the best dividend stocks to buy now.
Not only has its yield increased to roughly 4.5% as the stock has sold off, but goeasy also pays out less than 40% of its earnings per share.
So, if you’re looking for a rock-solid dividend stock to buy now, goeasy is certainly one I’d consider before it recovers in price.
