Investors flock to dividend stocks because their income is a nice hedge against market volatility. Many dividend stocks have defensive traits like contracted or regulated income streams.
These stocks tend to react slower than the broader market. As a result, you get a double whammy hedge (income returns and less volatility) from the broader market. If you are looking for some a mix of market hedges, these four dividend stocks are good no matter what the market does.
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Fortis stock: A top dividend-growth record
Fortis (TSX: FTS) has a market cap of $40 billion. It operates nine regulated transmission and distribution utilities across North America.
In terms of quality, this is one of the best and safest dividend stocks in Canada. A 52-year dividend-growth trajectory is a testament to its business longevity and quality.
The company continues to see good years ahead. It is aiming for 7% annual base case growth and 4-6% annual dividend growth. It yields 3.3% right now.
AltaGas: Growth and income
AltaGas (TSX: ALA) has market cap of $16.5 billion. This dividend stock has a U.S. utility that supplies gas to over 1.6 million customers in the U.S. It also has a midstream/export business that is smartly positioned across Western Canada.
Both businesses are doing very well. The utility is growing at an above-sector-average growth rate. The midstream business is enjoying substantial growth in demand for liquified petroleum gases (LPG) in Asia.
AltaGas has grown its dividend over the past six years by a 6% compounded annual growth rate (CAGR). It is aiming for a 5-7% dividend CAGR going forward. However, with a major uptick in growth recently, it could hit near the high end of its target. AltaGas stock yields 2.5% now.
Loblaw: Essential goods for stability
Loblaw (TSX: L) has a market cap of $70 billion. It operates Canada’s largest grocery and pharmacy brands. The fact is, no matter the economy, people need food, essentials, and pharmacy goods.
It has scale across Canada, which allows it to procure goods cheaper than competitors. Its leading loyalty platform helps keep consumers engaged and returning. It has done a good job of steadily improving margins over time.
This dividend stock has grown its dividend by a 12% CAGR over the past five years. It has 14 years of consecutive dividend increases. It yields 1%. This stock is a bit pricey, but you might need to pay up for its quality, essential business.
Royal Bank: Canada’s largest dividend stock
Royal Bank of Canada (TSX: RY) has a market cap of $413 billion. That makes it Canada’s largest stock and company. It also happens to be one of Canada’s best operated banks.
Royal has leading franchises in retail banking, commercial banking, wealth management, and capital markets. Its scale enables a low cost of funding and strong returns on equity. Its premium brand attracts premium customers, so that helps offset lending risks.
This dividend stock has grown its dividend by a 7% CAGR over the past decade. It just raised it 7% in 2026. Royal stock yields 2.35%. It is arguably expensive here. You may want to wait for a modest pullback to start building a position.
