Picking the right TSX dividend stocks can make a huge difference in a long-term portfolio. That’s especially true when a market pullback occurs and investors begin to question whether to wait or buy more.
Fortunately, market pullbacks create better entry points for those high-quality TSX dividend stocks. Here’s a look at five great TSX dividend stocks to build your portfolio with.
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Bank of Montreal brings scale and income
It would be difficult to compile a list of TSX dividend stocks and not consider one of Canada’s big bank stocks. Bank of Montreal (TSX: BMO) is the one in particular that investors should consider right now.
BMO is the oldest of the big banks, and that maturity brings scale, a broad customer base, and exposure across multiple segments. That includes personal banking, commercial banking, wealth management, and capital markets. That diversification gives the bank multiple ways to generate earnings across different market conditions.
Turning to income, BMO has provided investors with quarterly dividends without fail for nearly two centuries.
Fortis adds defensive stability
The second pick among the TSX dividend stocks to own is Fortis (TSX: FTS). Fortis isn’t the most exciting stock, but it is stable and offers investors steady growth and long-term income generation.
Fortis owns regulated utility assets that provide essential services. Those assets are tied to long-term regulated contracts that span decades. This means that Fortis continues to generate a recurring revenue stream irrespective of how the market moves.
More importantly, that consistent revenue generation allows Fortis to invest in growth initiatives and pay out a quarterly dividend.
In fact, Fortis has paid that dividend and provided annual increases to that payout for over 50 years. This makes it one of the best TSX dividend stocks on the market.
Suncor offers energy exposure with cash flow
Another option for investors to consider is Suncor Energy (TSX: SU). Suncor adds a different type of dividend exposure. Unlike a bank stock or a utility, Suncor is tied closely to the energy market.
That means the stock can be cyclical, and investors should expect volatility when oil prices move around.
That’s where Suncor can become an interesting pick in a portfolio of TSX dividend stocks. Suncor offers large-scale energy operations, including oil sands production, refining, and retail exposure. That fully integrated model gives Suncor multiple ways to generate cash flow across the energy value chain.
Turning to income, Suncor offers investors a quarterly dividend. The dividend is well-funded by operations, allowing Suncor to provide annual increases and buybacks.
Canadian National Railway is built into the economy
Another great TSX dividend stock to own is Canadian National Railway (TSX: CNR). Canadian National isn’t the highest-yielding dividend stock on the market, but there are few that offer the defensive appeal of this railway stock.
Canadian National operates one of the largest rail networks in North America. That network transports everything from grain and energy products to automotive components and raw materials.
This level of infrastructure is hard to replicate, and this gives Canadian National one of the largest defensive moats on the market.
One of the key reasons that Canadian National appeals to investors is for its compounding potential. The stock has provided annual increases to its dividend for decades, throughout market volatility and booms alike.
Granite REIT rounds out the list with real estate income
The final pick is Granite REIT (TSX: GRT.UN). Granite is one of Canada’s larger REITs, providing some real estate exposure in this portfolio of TSX dividend stocks.
Specifically, Granite’s portfolio is focused on industrial and logistics properties. These are sites built around supply chains, warehousing, and distribution.
In other words, Granite gives investors exposure to a property category backed by real demand. It also provides some diversification to the portfolio away from the more common bank, energy, utilities, and rail picks.
Turning to income, unlike the other companies mentioned above that pay out on a quarterly cadence, Granite offers investors a monthly distribution.
Own these TSX dividend stocks
No stock is without risk, and that’s why diversification is important. Fortunately, each of the five TSX dividend stocks mentioned above offers growth and defensive appeal in addition to offering some income-earning potential.
Buy them, hold them, and watch your portfolio grow.
