3 Dividend Stocks for Conservative Investors

Royal Bank of Canada (TSX:RY)(NYSE:RY) and these two other dividend stocks are great options for investors that want a good payout without the risk.

| More on:

Not all dividend stocks are created equal, and it’s important for investors to choose those that suit their investing strategy and profile. The three stocks listed below could be great choices for investors that have a conservative approach to investing.

Royal Bank of Canada (TSX:RY)(NYSE:RY) is one of the safest investments available on the TSX. The largest bank in Canada, RBC isn’t going anywhere but up over the long term. It would take a lot for the company to struggle and become a bad investment. With consistent sales growth and reliable profits, it’s a stable dividend stock that will look good in any portfolio.

The only knock on it is that you likely won’t see significant, double-digit returns from the stock. However, if you’re okay with a more modest returns coupled with a great dividend, then RBC could be a perfect fit. While you could definitely find a higher-yielding payout, RBC is the ultimate buy-and-forget stock that you won’t have to worry about, and you can sit back and watch the dividend payments roll in.

Year to date, RBC’s stock has risen by more than 10%, and it’s still trading at a very modest 12 times earnings.

BCE (TSX:BCE)(NYSE:BCE) is another good blue-chip stock that you can add to your portfolio. The stock is certainly riskier than a bank stock, and there are concerns about how cord cutting might impact its long-term growth. However, with lots of diversification and multiple industries that the company operates out of, BCE has a lot of diversification, which helps to keep its performance stable while creating many growth opportunities.

It’s a strong industry leader, and with a growing dividend that currently pays more than 5% per year, that’s a very high payout for a stock that doesn’t put investors’ money at much risk. Conservative investors will definitely appreciate that the company hasn’t seen profits fall below $2.9 billion over the past three years, while sales have been at least $21 billion during that time.

The stability and strong customer base helps BCE provide stability while making it easy for the company to build future growth.

Northland Power (TSX:NPI) will give you another industry to diversify your portfolio with. The utility provider is another great example of a company where strong, recurring sales can ensure investors see a lot of long-term stability. Heat and electricity are not negotiable items for most people, and so investors won’t have to worry about commodity prices or economic cycles adversely impacting this recession-proof stock.

And because Northland is a smaller stock than the others on this list, it also has a lot more potential upside as well. In 2018, its sales grew by more than 13% while profits were up 73%. While it’s not a guarantee that those kinds of numbers will continue, Northland has seen both it top and bottom lines increase for the past three years. It’ll be a big bonus if that trend can continue, as with a dividend yield of 4.8%, Northland is already a great dividend stock to own.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor David Jagielski has no position in any of the stocks mentioned.

More on Dividend Stocks

analyze data
Dividend Stocks

Here’s Why the Average TFSA for Canadians Aged 41 Isn’t Enough

The average TFSA simply isn't enough for most Canadians in their early 40s. Here's how to catch up.

Read more »

cloud computing
Dividend Stocks

Insurance Showdown: Better Buy, Great-West Life or Manulife Stock?

GWO stock and MFC stock are two of the top names in insurance, but which holds the better outlook?

Read more »

concept of real estate evaluation
Dividend Stocks

How to Earn a TFSA Paycheque Every Month and Pay No Taxes on It

Canadian REITs can turn your TFSA into a monthly paycheque machine for life. Here's how Morguard North American Residential REIT…

Read more »

A plant grows from coins.
Dividend Stocks

The Smartest Dividend-Growth Stocks to Buy With $1,000 Right Now

New dividend-growth investors should consider CN Rail (TSX:CNR) stock and another top play if they're looking to build wealth over…

Read more »

Dividend Stocks

The 3 Top Canadian Stocks to Buy With $1,000 Right Now

If you want consistent income, look to consistent dividend payers. These three stocks are some of the best in the…

Read more »

A worker gives a business presentation.
Dividend Stocks

Want a 6% Average Yield? 3 TSX Stocks to Buy Today

These stocks pay good dividends that should continue to grow.

Read more »

chart reflected in eyeglass lenses
Dividend Stocks

Is Alimentation Couche-Tard Stock a Buy for its 0.9% Dividend Yield?

Couche-Tard stock's small yield is not enticing, but its growth potential could be a wealth creator.

Read more »

Hourglass and stock price chart
Dividend Stocks

5.2% Dividend Yield! I’m Buying This TSX Stock and Holding for Decades!

With its 5.2% dividend yield, Toronto-Dominion Bank (TSX:TD) is a stock I'm eagerly buying.

Read more »