When you earn dividends, you don’t just receive income. You earn immediate returns that you can reinvest in more shares or new shares, continuing to increase your returns.
That can be incredibly powerful and beneficial, especially during volatile markets, when ultra-safe Canadian stocks are still paying their dividends and stocks are trading cheaply across the board.
That’s why reliable Canadian dividend stocks that you can rely on in any market are so important. High-yield stocks are more attractive, but chasing the highest yield can be risky, especially if that dividend isn’t sustainable.
In fact, companies with ultra-safe dividend yields often turn out to be better long-term investments. Because they don’t pay out every dollar they earn, they can reinvest in their business, grow cash flow, and increase dividends over time.
So if you’re looking for reliable Canadian dividend stocks that you can buy now and hold for years, here are three of the best on the market: TSX.
Two of the safest dividend stocks Canadians can own
If you’re looking for reliable Canadian dividend stocks to buy now, here are two of the safest ones to consider Enbridge (TSX:ENB) and Fortis (TSX:FTS). Both run incredibly reliable businesses that generate predictable cash flow year after year, which is exactly what you want if you rely on dividends.
Fortis is a regulated utility company that owns electricity and gas assets in North America. Because most of its activities are regulated, Fortis achieves a fixed return on its investments, making its cash flow extremely stable and predictable. This stability ensures that Fortis can pay a reliable dividend and increase it steadily over time.
Fortis has increased its dividend for more than 50 years in a row. And today the stock offers a yield of about 3.5%, and the payout ratio is just under 75%, which is right in the middle of the historical range of about 70% to 80%.
This safety margin not only ensures that the dividend is sustainable, but also allows Fortis to further expand its activities to guarantee future dividend increases.
In many ways, Enbridge is similar to Fortis, and while its operations are not as regulated as Fortis’s, it is still incredibly reliable.
Enbridge also owns a regulated utility, but the bulk of its business comes from its vast energy infrastructure network, which is not only essential to the North American economy but also largely supported by long-term contracts that generate stable, predictable cash flow.
So with Enbridge offering a dividend yield of around 6% and its payout ratio this year not expected to exceed 68% even if it only hits the lower end of its distributable cash flow guidance, it’s easily one of the best Canadian dividend stocks to buy right now.
Therefore, it is no surprise that Enbridge, like Fortis, also has a long track record of consistent annual dividend increases that have continued for more than three decades.
One of the best real estate stocks to buy for passive income seekers
Besides Fortis and Enbridge, there’s another top Canadian dividend stock you can buy with confidence Granite REIT (TSX:GRT.UN).
Granite owns a portfolio of high-quality industrial and logistics properties, many of which are leased to strong long-term tenants. Furthermore, demand for these properties has risen rapidly, making Granite not only a reliable dividend stock, but also a solid long-term growth stock.
With shares still trading cheaply in this environment, Granite offers an attractive dividend yield of around 4.1%. But even more importantly for investors, the adjusted funds from operations payout ratio is only 68%.
Furthermore, that payout ratio has declined in recent years, even as Granite has continued to increase its payout annually.
So if you’re looking for a Canadian dividend stock with great potential that you can own with confidence for years to come, Granite is undoubtedly one of the best to consider.
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