New investors often struggle with the key question of which dividend stocks they should purchase when starting out. Fortunately, the market gives us plenty of great options to choose from.
The following three options offer simple, reliable business models that have provided recurring dividend income for decades and continue to prove themselves in every market cycle and through market volatility. Together, they can provide stable, diversified cash flow for any portfolio.
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Start with a high-yield bank stock
It would be impossible to mention some of the best dividend stocks to buy without mentioning one of Canada’s big bank stocks.
Bank of Nova Scotia (TSX:BNS) fits that part perfectly. Historically known as Canada’s most international bank, Scotiabank generates a growing share of its revenue from its growth-focused international markets. In recent years, those markets have shifted from more volatile Latin American markets to more stable markets in the U.S. and Mexico.
That growth-focused international business is just one side of the equation. Scotiabank’s domestic segment offers stability from its regulated, essential and most importantly, stable Canadian business.
Turning to income, Scotiabank offers a quarterly dividend that carries a yield of 4.3%. The bank also offers investors an incredible 190-year history of uninterrupted payments. That spans every major economic cycle in nearly two centuries.
Factor in over a decade of consecutive annual increases, and you have one of the best, most defensive dividend stocks for investors to buy and hold for decades.
Canada has two Dividend Kings, and you can own one
Canadian Utilities (TSX:CU) represents another one of the great dividend stocks that investors should consider buying.
Utility stocks like Canadian Utilities generate predictable earnings that are backed by long-term regulated contracts. The sheer necessity of utility services makes Canadian Utilities one of the most defensive picks on the market.
That’s because unlike a cell phone bill, consumers cannot trade down their utility bill to a cheaper plan. Canadian Utilities’ low-volatility revenue stream allows the company to continue investing in growth while paying its record-setting quarterly dividend.
That record is the longest streak of consecutive annual increases in Canada, currently at 53 years. The current yield works out to 3.9%. Not only does that make Canadian Utilities one of just two Dividend Kings in Canada, but one of the best long-term holdings for any portfolio.
Generate a monthly income backed by large retail
SmartCentres REIT (TSX:SRU.UN) rounds out the trio of dividend stocks. REITs offer investors exposure to real estate and, in most cases, a recurring monthly income stream.
SmartCentres’ portfolio is focused on retail centres that are anchored by some of the largest names in retail, such as Walmart. The company’s setup and prime tenant portfolio allow its properties to draw on high traffic that translates into reliable monthly distributions.
As of the time of writing, SmartCentres offers a yield of 6.7%, making it one of the better-paying options on the market.
For investors who want steady monthly cash flow without taking on unnecessary risk, SmartCentres represents a straightforward, durable choice.
Own these dividend stocks today
The trio of options mentioned above helps to create a balanced dividend foundation. That includes a high‑yield bank, a defensive utility, and a monthly‑pay REIT. It’s a simple mix that also offers growth and defensive appeal, making it an ideal pick for any investor.
For anyone looking to build long-term dividend stability, this trio is a strong place to start any well-diversified portfolio.
Buy them, hold them, and watch your income grow.
