Undoubtedly, there’s plenty for investors to stress about right now. Recessionary red flags appear to be popping up everywhere, from plunging oil and crypto prices, to weakening demand for AI stocks and building concerns around the consumer and jobs market.
That said, certain companies have less exposure to these broadly weakening trends. In this piece, I’m going to dive into three such Canadian dividend stocks I think can provide the kind of low-stress dividend income many are seeking over the long term.
Without further ado, let’s dive in!
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Agnico Eagle
Let’s start with one stock that can provide ample downside protection, or a market hedge, for those concerned about these aforementioned risks. Agnico Eagle (TSX: AEM) is a top Canadian gold miner with an absolutely beautiful chart, shown below.
Of course, most of the move we’ve seen in AEM stock of late has to do with surging gold prices. The price of gold continues to hover around US$4,100 per ounce, and I remember questioning whether gold prices could ever break through the $2,000 level more than a decade ago.
But here we are, and companies like Agnico Eagle are really raking in the cash flow necessary to not only buy back shares, but raise its dividend considerably. With a current yield of 1% (considerably lower of late due to the massive capital appreciation this stock has seen), I think investors can rest well at night owning this name.
In this market, that’s what’s most important.
Fortis
Fortis (TSX: FTS) is another top dividend stock I continue to drone on about. There are solid reasons for this, including but not limited to the company’s 51-year track record of raising its dividend.
That kind of dividend growth is definitely hard to come by, in general. However, as a top regulated utilities provider of both electricity and natural gas to millions of residential and commercial customers, Fortis’ cash flow more than supports its current 3.5% dividend yield and future potential increases.
For investors looking for a company with the underlying growth catalysts (if AI is as big as everyone says it will be, we’re going to need a lot more power) and the ability to continue to increase its dividend at a 6%–7% clip for the foreseeable future, Fortis is the pick to consider.
Telus Communications
One of Canada’s top telecommunications giants, Telus Communications (TSX: T) is one of my top picks for long-term investors looking to benefit from not only a reasonable dividend yield, but one that’s stable and consistent over time.
Now, Telus doesn’t have the prettiest chart of the bunch. In fact, its chart has been pretty ugly of late, driving the company’s dividend yield to a sky-high 8.9%.
At this level, many in the market appear to be doubting the company’s ability to maintain and grow its dividend over time. I have seen some data around delinquencies in the telecom industry that are picking up, which I think is driving this narrative.
That said, in the online world we live in, I fail to see how sales can possibly decline for telecommunications companies that continue to raise prices and have seemingly unmitigated ability to do so, while providing a service that’s relatively low cost compared to other services in the market.
In my view, this recent dip is one worth buying. The stock offers a nearly 9% yield that looks like it’s worth legging into right now.
