Every investor is different. Some prioritize dividend stocks while others focus on growth. Some are willing to take on more risk in pursuit of higher returns, while others prefer stability and consistency.
That’s why no two portfolios are exactly the same. Even two investors who own the exact same stocks may hold them in very different proportions depending on their goals, time horizon, and risk tolerance.
However, while every portfolio is unique, there are still a handful of stocks that seem to show up again and again: the ones that operate in essential industries, have strong competitive advantages, generate reliable cash flow, and offer long-term growth potential.
So, if you’re looking for some of the best dividend stocks on the TSX that almost every investor will want to own, here are three of the best picks.
Source: Getty Images
Two of the best long-term compounders on the TSX
There’s no question that one of the very best Canadian dividend stocks belonging in almost every investor’s portfolio is Brookfield Asset Management (TSX: BAM).
Brookfield Asset Management is one of the largest alternative asset managers in the world, overseeing investments across infrastructure, renewable energy, private credit, real estate, and other real assets.
One of the biggest reasons the stock appeals to so many different investors is its flexibility. Whether you’re looking for growth, income, or a combination of both, Brookfield offers a little bit of everything.
The company benefits from several long-term trends, including growing demand for infrastructure, renewable energy, and alternative investments.
At the same time, its fee-based business model allows it to generate a tonne of recurring earnings while continuing to expand its platform and scale its operations.
And because it constantly raises capital for new investments without needing to commit as much of its own, it can continue growing rapidly while still offering an attractive yield of 4.1%.
That’s not something most stocks can do, and it’s a big reason why it’s one of the best long-term compounding dividend stocks on the TSX.
Meanwhile, Dollarama (TSX: DOL) is another high-quality dividend stock that belongs in almost every investor’s portfolio.
And while, at first glance, Dollarama may seem like an unusual choice for a dividend-stock list, since the stock’s current yield of just 0.25% is relatively small compared to many traditional dividend payers, that’s actually part of what makes Dollarama so attractive.
Rather than paying out a large percentage of its earnings, the company continues reinvesting heavily into growing the business, taking full advantage of its long organic growth runway as consumer habits have shifted over time. That’s a big reason why the stock has delivered an impressive 560% return over the last decade.
In other words, management has consistently shown it can generate higher returns by reinvesting capital than by distributing it to shareholders, which is a trade-off most investors happily accept.
And the fact that it’s one of the best defensive growth stocks you can own is why it’s a name that belongs in almost every investor’s portfolio, despite its lower yield.
One of the best dividend stocks to buy for renewable exposure
In addition to Brookfield Asset Management and Dollarama, another high-quality Canadian dividend stock that most investors will want to own is Brookfield Renewable Partners (TSX: BEP.UN).
Brookfield Renewables owns a massive, globally diversified portfolio of hydroelectric, wind, solar, and energy storage assets that generate cash flow around the world.
Furthermore, many of its assets operate under long-term contracts, helping create predictable cash flow and supporting its attractive dividend.
At the same time, the business still has meaningful growth opportunities ahead. It has strong access to capital, especially as institutional investors continue looking for exposure to an industry with massive long-term potential and improving economics.
And with global electricity demand continuing to rise, along with ongoing investment in energy infrastructure, renewable power is becoming increasingly important to the global economy.
Therefore, the fact that it currently yields 4.3%, while still offering years of growth potential, is what makes Brookfield Renewables a dividend stock that most investors will want to consider for their portfolio.
