Dividend stocks can be excellent tools for long-term wealth creation, offering investors the potential for both capital appreciation and regular income. Reinvesting dividends can further enhance returns through compounding. However, dividend payments are not guaranteed, making it important to focus on companies with strong fundamentals, reliable cash flows, consistent dividend histories, and solid growth prospects.
Against this backdrop, the following two dividend stocks offer attractive opportunities for long-term investors. Let’s take a closer look at these two stocks.
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SmartCentres Real Estate Investment Trust
SmartCentres Real Estate Investment Trust (TSX:SRU.UN) is a fully integrated Canadian REIT that owns and operates approximately 200 strategically located properties across the country. Its diversified tenant base is another strength, with 95% of tenants operating at the national or regional level and 80% providing essential services. This business model supports stable occupancy and cash flows across economic cycles, enabling the REIT to pay dividends consistently. Its monthly payout of $0.1542 per share translates into a healthy forward yield of 6.46%.
In its recently reported second-quarter results, SmartCentres’ occupancy rate increased 0.5 percentage points year over year to 98.1%, supported by the leasing of 247,000 square feet of previously vacant space. The REIT also renewed approximately 86% of leases expiring this year, with a 12% rent increase. Same-property NOI (net operating income) rose 2.6%, supported by stronger customer traffic and an improved tenant mix. However, reported NOI declined 1% to $139.9 million, while the REIT posted a net and comprehensive loss of $147 million, compared with income of $109.2 million a year earlier. The decline was primarily due to a $196.2 million fair-value loss on investment properties.
Looking ahead, SmartCentres’s growth prospects remain encouraging, supported by rising demand for retail space, limited new supply, and higher construction costs. The REIT is developing a 200,000-square-foot Canadian Tire store and expects to hand over the property in the fourth quarter of this year. It is also advancing self-storage projects in Burnaby and Victoria following the partial openings of facilities in Montreal and Laval. Overall, approximately 0.8 million square feet of properties are under construction, with another 87 million square feet in various stages of planning and development. Given its resilient cash flows and substantial development pipeline, SmartCentres remains an attractive option for income-focused investors.
Bank of Nova Scotia
Another dividend stock I would be comfortable owning for the next five years is Bank of Nova Scotia (TSX:BNS), which provides a broad range of financial services across multiple countries. Its diversified revenue streams support stable and reliable cash flows, enabling the bank to maintain its impressive dividend track record since 1833. Scotiabank has also increased its dividend at an annualized rate of 4.5% over the past decade and currently offers an attractive forward yield of 3.62%.
Looking ahead, Scotiabank is repositioning its business toward higher-profit North American operations while reducing its exposure to riskier, lower-return Latin American markets. This strategic repositioning could enhance the stability and quality of the bank’s earnings and cash flows. As part of this strategy, the bank is pursuing the acquisition of MapleMark Bank, which could strengthen its presence in the United States. At the same time, its efforts to acquire the remaining shares of Scotia Group Jamaica Limited could improve capital allocation and operational efficiency.
Meanwhile, a relatively higher interest-rate environment could support Scotiabank’s core lending business. Its ongoing share repurchase program, which allows it to buy back up to 15 million shares, could reduce the outstanding share count by approximately 1.2% and further enhance shareholder returns. Given its strategic repositioning, strong dividend history, and growth initiatives, Scotiabank is well positioned to deliver attractive long-term returns to income-focused investors.
