Building a reliable and consistently growing stream of passive income is one of the best goals to have when investing in the stock market. When you buy the best dividend stocks on the market and build a portfolio that can constantly generate passive income, it not only gives you stability, but it also gives you flexibility and a way to grow wealth regardless of the market conditions.
That’s why dividend stocks are often the foundation of that strategy for long-term investors. Not only do dividends provide regular income, but when they’re reinvested, they can significantly boost compounding over time. Furthermore, high-quality dividend stocks are often some of the most well-established and dominant companies in their industries.
So, not only do they consistently generate returns for investors, but they’re also some of the best stocks to rely on during periods of higher volatility or increasing uncertainty in the economy.
However, not all dividend stocks are reliable passive income generators. Some offer high yields but little growth, while others grow quickly but don’t generate enough cash today to support meaningful income.
The best dividend stocks offer investors an attractive mix. They pay compelling but reliable dividends today, have room to grow those payouts over time, and operate businesses that can perform through a wide range of economic conditions.
So, if you’re looking to boost the passive income your portfolio generates each year, here are three of the best dividend stocks to buy now.
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Two top real estate stocks for passive income seekers
If you’re looking for some of the best dividend stocks to buy for years of passive income, high-quality REITS like Granite REIT (TSX: GRT.UN) and CT REIT (TSX: CRT.UN) are some of the best to consider.
Real estate is one of the best sectors for passive income if you pick the right stocks because these businesses generate tonnes of recurring cash flow every month, and often they even pay dividends monthly instead of quarterly.
CT REIT, specifically, is one of the best because of its high-quality portfolio of retail real estate across Canada, with the vast majority of its properties leased to Canadian Tire and its affiliated brands.
That relationship with one of the best-known retailers in Canada is what makes CT REIT so dependable. Canadian Tire is not just an investment-grade tenant; it’s also the largest shareholder of CT REIT.
This structure gives CT REIT extremely predictable cash flow, which is exactly what income-focused investors want. Furthermore, as Canadian Tire invests in new stores, renovations, and expansions, CT REIT often plays a role in funding and owning that real estate, creating a steady pipeline of growth without taking on excessive risk.
Plus, CT REIT offers a compelling yield of more than 5.8% and has increased its dividend every year since going public.
Meanwhile, Granite REIT is another of the best dividend stocks to buy for growing passive income due to its portfolio of industrial, warehouse, and logistics properties spread across North America and Europe.
These properties continue to see growing demand, which has helped Granite’s profitability rise rapidly. In fact, over the last five years, even as it has continued to increase its dividend, its payout ratio of adjusted funds from operations (AFFO) declined from 81% to 68% over that stretch.
So, if you’re looking for the best dividend stocks to buy for decades of passive income, Granite and its current yield of 4.3% is one of the best choices on the TSX.
One under-the-radar dividend stock to buy for years of passive income
In addition to those two top REITs, the third stock on this list might surprise some investors, but it deserves serious consideration. goeasy (TSX: GSY) is widely known as a high-growth stock, but it’s also one of the best dividend growth stories on the TSX.
In fact, over the last five years alone, its dividend has grown by over 120%. Because the stock has been growing so rapidly, its yield has remained lower, so goeasy has flown under the radar as a top dividend stock.
However, now that the stock has pulled back significantly, it’s not just trading cheaply; it’s offering a yield of more than 4.4%. Plus, the stock is paying out just 36% of its trailing 12-month earnings per share.
So, if you’re looking for the best dividend stocks in Canada to buy for years of passive income, goeasy is undoubtedly a stock that should be on that list.
