The best way for dividend investing to work is to invest in and hold great businesses for decades. This allows the income from those dividend stocks to be reinvested so compounding can do the work.
Part of the problem in achieving that goal is being able to pick the right dividend stocks that can provide that income without fail over decades. That calls for durable, predictable and resilient picks that can withstand different economic cycles.
Fortunately, there’s no shortage of great picks on the market to pick from. That includes this trio of dividend stocks to buy now and hold for decades.
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Generate long-term dividend strength
The first among the dividend stocks for investors to consider for long-term gains is Bank of Montreal (TSX: BMO). BMO is the oldest of Canada’s big bank stocks, with an impressive history of paying dividends that extends back nearly two centuries.
That level of consistency is rare. Today, the bank offers investors diversified operations and disciplined risk management in addition to a growing presence in the U.S.
That U.S. presence extends to over 30 state markets, where BMO offers U.S. banking, wealth management, and capital markets services. Even better, that’s in addition to BMO’s core domestic segment that generates a reliable revenue stream that leaves room for both growth and dividends.
BMO’s quarterly dividend currently pays out a respectable 3.34%, making it one of the dividend stocks to hold in any long-term portfolio.
This combination of scale and stability makes BMO one of the most reliable financial-sector dividend stocks for long-term investors.
Deliver dependable income through regulated utilities
It’s hard to mention long-term dividend stocks and not think of mentioning Fortis (TSX: FTS). Fortis is one of the largest utility stocks in Canada, with a presence not only at home, but also in the U.S. and in some Caribbean countries.
Utility stocks like Fortis generate the bulk of their income from regulated utility operations, which results in predictable cash flow. As a regulated utility, Fortis benefits from stable cash flows that support long-term dividend growth regardless of economic conditions.
This structure makes Fortis less sensitive to economic cycles, giving investors a defensive anchor in their portfolios.
Fortis’s dividend boasts a 3.18% yield and comes with 53 consecutive annual increases. This not only makes Fortis one of just two Dividend Knights in Canada but also makes the stock one of the most defensive and stable picks on the market.
For investors seeking dependable income, Fortis remains one of the most consistent dividend-growth companies in North America.
Metro provides steady growth in essential consumer spending
The final pick for investors seeking dividend stocks to hold for the long term is Metro (TSX: MRU). Metro is one of Canada’s largest grocery and pharmacy stocks, operating a large network concentrated in both Ontario and Quebec.
Grocers are some of the most defensive and underrated investment options on the market. That’s because, like utility stocks, grocers provide a necessary service and are less impacted by shifts in the market during downturns like other, more discretionary spending groups.
More specifically, the essential goods that Metro sells give it resilience during inflationary periods, resulting in a stable foundation for earnings and cash flow. Its focus on essential goods positions Metro as a defensive stock that can maintain steady performance even during periods of economic uncertainty.
This also supports Metro’s quarterly dividend, which pays out a 1.75% yield.
Prospective investors should note that, like the other stocks mentioned above, Metro has provided annual upticks to that dividend for over two decades and has also engaged in share buybacks.
For investors seeking dividend stocks with steady growth potential, Metro stands out as a reliable choice.
Combined with its steady expansion and disciplined capital allocation, Metro offers long-term investors a dependable source of compounding returns.
These dividend stocks can work well together in a long-term portfolio
BMO, Fortis, and Metro provide investors with a balanced portfolio of dividend stocks that can provide income and growth wrapped with some defensive appeal.
Together, these companies provide exposure to financials, utilities, and consumer staples, creating a balanced foundation for long-term dividend investing.
In my opinion, investors seeking dividend stocks that can provide both growth and income should consider adding one or all of these to any larger, well-diversified portfolio.
Buy them, hold them, and watch your portfolio grow.
