Steady cash flow typically comes from dividend stocks with underlying businesses that can weather the storm of an uncertain economy. The best dividend stocks have businesses with resilient business models offering essential services, recurring revenues, and sustainable payout ratios.
Today, we will discuss five TSX dividend stocks you can consider investing in amid any market environment.
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Fortis
Fortis (TSX: FTS) is a $39.01 billion market-cap giant in the Canadian utility industry. The company owns and operates several utility businesses in Canada, the U.S., and the Caribbean. Most of the company’s assets are tied to long-term contracts in rate-regulated markets. It means Fortis generates virtually predictable revenue.
The defensive nature of its services, its business model, and well-run management allow Fortis stock to keep increasing payouts to investors. Boasting an over 50-year dividend-growth streak, Fortis stock trades for $76.62 at the time of writing. It also pays $0.64 per share each quarter, translating to a 3.34% dividend yield.
Killam Apartment REIT
Killam Apartment REIT (TSX: KMP.UN) is a real estate investment trust (REIT) that investors can buy into and secure monthly distributions like a landlord, but without all the hassle that comes with it. The trust owns a portfolio of apartments and manufactured housing communities, generating reliable rental income, aided by high occupancy rates.
It is one of Canada’s largest REITs that continues expanding through targeted acquisitions and increasing earnings from existing operations. KMP.UN pays its investors $0.06 per share each month, translating to an annualized 4.26% dividend yield, which you can lock into your self-directed portfolio today.
OpenText
OpenText (TSX: OTEX) is an unlikely entry here since it is quite atypical for tech stocks to offer shareholder dividends. Tech stocks are typically high-growth-focused businesses that rarely pay any dividends since most of the focus is on growth and achieving profitability. OTEX is a $7.87 billion market cap company that designs, develops, markets, and sells enterprise information management software and solutions.
Thanks to its business model, OTEX is not like most other tech stocks. It has a sticky customer base that supports healthy recurring cash flow for the underlying business. The company’s board also declared that the stock will pay US$0.275 per share each quarter, translating to a 4.78% dividend yield.
Mullen Group
Mullen Group (TSX: MTL) is another company providing an essential service to its clients. The $2.06 billion market-cap logistics giant provides trucking and logistics services to clients across North America. While logistics can be a cyclical industry, Mullen has expanded itself enough to generate reliable cash flows through different market conditions.
Accordingly, MTL stock is also a reliable monthly dividend-paying stock. As of this writing, it trades for $21.50 per share at writing and pays $0.07 per share each month, translating to a 3.91% dividend yield that you can lock into your self-directed portfolio.
AltaGas
AltaGas (TSX: ALA) is another stock that fits the bill for income-seeking investors. The $15.82 billion market-cap North American energy infrastructure company services its customers through various segments, including a strong utility operation operating in Canada and the United States. The company enjoys a combination of growth from its exports and midstream assets, securing its revenues with regulated cash flow from its utility business.
As of this writing, AltaGas stock trades for $50.79 per share, and it pays $0.334 per share each quarter, translating to an annualized 2.63% dividend yield.
Foolish takeaway
Dividend stocks can be a powerful tool for long-term wealth creation. Held in a Tax-Free Savings Account (TFSA), your self-directed portfolio of dividend stocks can grow in value without incurring taxes on capital gains or dividend income. To this end, these five TSX stocks might be worth considering for your portfolio.
