Building a portfolio of the best TSX dividend stocks has huge advantages. Not only can it provide a growing source of income over longer periods, but if the right stocks are picked, they can provide sufficient defensive appeal to weather market volatility.
Fortunately, there’s no shortage of great TSX dividend stocks to choose from that can accomplish that goal.
Here are five names that cover different parts of the market and have long histories of paying investors.
Source: Getty Images
#1 Earn dependable income from energy infrastructure
Few stocks on the market offer the appeal that Enbridge (TSX: ENB) does. Enbridge is one of the largest energy infrastructure companies on the market. Most of Enbridge’s revenue stems from its pipeline business. That segment includes both crude and natural gas elements, transporting huge amounts of both across North America daily.
In addition to the pipeline business, Enbridge also has a growing renewable energy operation and a natural gas utility. These segments provide stable cash generation that allows Enbridge to invest in growth initiatives and pay its attractive 5.1% dividend yield.
Finally, investors should note that Enbridge has paid dividends without fail for decades and has increased its dividend annually for three decades.
This makes Enbridge one of the top TSX dividend stocks to buy. But also, a great buy-and-forget option.
#2 REITs can provide monthly income tied to necessities
REITs offer investors a great way to invest in real estate and generate a monthly income, just like a landlord. And among the many REITs on the market, one that stands out in particular right now is RioCan REIT (TSX: REI.UN).
RioCan is one of the largest REITs in Canada, with a portfolio of primarily commercial and mixed-use residential properties. In recent years, the REIT has moved to increase the number of mixed-use properties it has in its portfolio. This provides investors with a unique opportunity to benefit from both the essential services that its commercial properties offer and the increasing need for housing in Canada’s metro markets.
As of the time of writing, RioCan offers a yield of 5.4% that is paid out on a monthly cadence, handily making it one of the top TSX dividend stocks to own.
#3 Earn income from a stable, top Canadian bank
It would be hard to mention the best TSX dividend stocks and not mention one of the big bank stocks. Toronto-Dominion Bank (TSX: TD) is the second largest of the big banks, and offers investors a cross-border banking investment that is focused on growth and income.
TD’s strong growth in the U.S. market sets it apart from its peers. Even better, the bank also offers investors nearly two centuries of uninterrupted dividend payments. The current yield works out to 2.9%, and like its big bank peers, TD offers over a decade of annual increases.
#4 Utilities can provide a stable, growing income stream
Utility stocks are great long-term holdings. They offer a reliable business model backed by regulated contracts that result in steady earnings and recurring dividends.
Emera (TSX: EMA) is a great example of this. The company provides electricity and natural gas to customers across North America. Emera is also investing consistently in improving and growing its infrastructure to support long-term growth.
The utility currently offers a yield of 4.1%, making it a solid blend of income and stability that’s wrapped in a defensive shell. And like TD and Enbridge, Emera offers years of annual increases.
#5 A financial institution with a global growth profile
Rounding out the top TSX dividend stocks is Manulife (TSX: MFC). Manulife is one of Canada’s largest insurers. Despite its strong domestic presence, Manulife’s international presence is what investors should really be watching.
Its global footprint provides diversified revenue streams, with a growing focus on high-growth Asian markets. With a 3.6% yield, Manulife offers a steady dividend backed by a defensive business model.
Are you investing in these top TSX dividend stocks?
No stock is without risk, and that includes the five stocks mentioned above. Fortunately, each of the stocks above offers defensive appeal and growth potential in addition to their attractive yields.
For long-term investors, these TSX dividend stocks can provide the long-term compounding needed to build a solid, income-focused portfolio.
Buy them, hold them, and watch your portfolio grow.
