Dividend Kings: 2 TSX Stars to Watch

Looking for TSX dividend kings to pick up shares of? These two household TSX names are ideal for long-term investors seeking stability.

| More on:

For long-term stock investing, Dividend Aristocrats often offer great total return potential. These dividend kings allow investors to take advantage of compounding over time to unlock huge gains.

Now, there’s no question that the market has had its share of turbulence recently. However, long-term investors can look past this by focusing on stocks with solid fundamentals.

While most stocks were hit hard during 2020, some have the resiliency needed to recover easily. So, these are the dividend kings investors would be most interested in.

Today we’ll look at two TSX giants that offer long-term stability to investors with reliable dividends.

Fortis

Fortis (TSX:FTS)(NYSE:FTS) is a large Canadian holding company specializing in the distribution of electric utilities across both Central and North America.

This dividend king has long been a great example of a stable dividend stock. While it doesn’t typically offer tremendous share price growth, it consistently raises its dividend payout to investors.

This stability is underscored by a beta of 0.06, suggesting that Fortis is highly resilient to stock market swings. Over time, Fortis can deliver stable results for long-term investors.

Now, it’s important to understand how Fortis is able to be such a reliable stock. This is mainly due to the structure of its utility distribution channels, as nearly all of its services are provided through regulated contracts.

This means that Fortis has very predictable and certain means of generating revenue. As such, it often offers little in the way of performance surprises, but also offers a rock-solid dividend.

As of this writing, this dividend king is trading at $50.80 and yielding 3.98%. A near-4% yield attached to a name like Fortis should be enticing for long-term investors.

When it comes to utility stocks with predictable but solid performance, Fortis is near the top of the heap.

RBC

Royal Bank of Canada (TSX:RY)(NYSE:RY) is the largest bank in Canada by market cap and a household name when it comes to dividend stability.

This dividend king offers investors both decent share price growth and an ever-growing dividend. Combine those and RY makes for a great long-term pick for investors.

Despite potential obstacles in the short run, sentiments for RY for the long haul should still be largely positive. Surely, super-low interest rates and things of the like aren’t ideal for the bank, but those are temporary measures.

As of this writing, RY is trading at $108.07 and yielding 4%. While this yield isn’t far in excess of RY’s typical yield, it’s still solid enough to attract long-term investors.

When discussing dividend kings, it’s hard not to mention practically any of the major Canadian banks. However, RY has long been the biggest fish in the pond and offers investors a great deal of reliability for the future.

Dividend kings strategy

FTS and RY are both incredibly reliable dividend stocks ideal for long-term investing. While they typically won’t net you high returns in any given year, the power of compounding over time helps investors win in the long run.

If you’re looking for some dividend kings to scoop up, these are certainly two names to keep in mind.

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 Jared Seguin has no position in any of the stocks mentioned. The Motley Fool recommends FORTIS INC.

More on Dividend Stocks

investment research
Dividend Stocks

Best Stock to Buy Right Now: TD Bank vs Manulife Financial?

TD and Manulife can both be interesting stock picks for today, depending on your investment style.

Read more »

A worker gives a business presentation.
Dividend Stocks

2 Dividend Stocks to Double Up on Right Now

These stocks are out of favour but could deliver nice returns over the coming years.

Read more »

Man holds Canadian dollars in differing amounts
Dividend Stocks

This 5.5 Percent Dividend Stock Pays Cash Every Month

This defensive retail REIT could be your ticket to high monthly income.

Read more »

Confused person shrugging
Dividend Stocks

Passive Income: How Much Do You Need to Invest to Make $600 Per Month?

Do you want passive income coming in every single month? Here's how to make it and a top dividend ETF…

Read more »

Canadian Dollars bills
Dividend Stocks

3 Monthly-Paying Dividend Stocks to Boost Your Passive Income

Given their healthy cash flows and high yields, these three monthly-paying dividend stocks could boost your passive income.

Read more »

Make a choice, path to success, sign
Dividend Stocks

The TFSA Blueprint to Generate $3,695.48 in Yearly Passive Income

The blueprint to generate yearly passive income in a TFSA is to maximize the contribution limits.

Read more »

hand stacks coins
Dividend Stocks

3 Ultra-High-Yield Dividend Stocks You Can Buy and Hold for a Decade

These three high-yield dividend stocks still have some work to do, but each are in steady areas that are only…

Read more »

senior man and woman stretch their legs on yoga mats outside
Dividend Stocks

TFSA: 2 Canadian Stocks to Buy and Hold Forever

Here are 2 TFSA-worthy Canadian stocks. Which one is a good buy for your TFSA today?

Read more »