Stock market investing can be overwhelmingly stressful when you start. The market is full of uncertainty, and fear-driven decisions can often result in significant losses for beginner and veteran stock market investors alike. However, investing in the stock market has proven a viable method to generate significant long-term wealth growth.
If you are just starting investing, you should know that there are various strategies you can use in stock market investing in growing your wealth. As a beginner, you might want to dive into some of the more exciting prospects on the TSX — i.e., growth stocks. However, it might be better to start by dipping your toes and treading carefully, as you get a feel of how financial markets work.
Investing in high-quality dividend stocks can be an excellent approach to start investing. Reliable dividend stocks provide you with returns through capital gains and quarterly or monthly distributions. The best dividend stocks continue to pay shareholder dividends during volatile market environments, mitigating some of the losses you might have to contend with until the market stabilizes again.
Today, I will discuss two top dividend stocks for beginner investors that you should have on your radar.
Fortis
Fortis (TSX:FTS)(NYSE:FTS) is a $30.10 billion market capitalization utility holdings company. It owns and operates several electric utility businesses across Canada, the U.S., Central America, and the Caribbean.
The company generates most of its cash flow through rate-regulated and long-term contracted assets, allowing Fortis to earn predictable revenues. Due to its stable earnings, the company’s management can comfortably fund its growing shareholder dividends and capital investment programs.
Fortis stock trades for $63.50 per share at writing, and it boasts a 3.37% dividend yield. Fortis is also a Canadian Dividend Aristocrat with a 48-year dividend-growth streak. The dividend stock has been introducing dividend hikes for almost half a century. Investing in its shares could help you secure an income-generating asset that might keep growing its payouts for years to come.
BCE
BCE (TSX:BCE)(NYSE:BCE) is a $66.40 billion market capitalization giant in the Canadian telecom industry. BCE has a stable, steady, and defensive business that can generate strong cash flows regardless of macroeconomic conditions. Its stability is characterized by its consistently strong balance sheet.
BCE stock trades for $73.41 per share at writing, and it boasts a juicy 5.01% dividend yield. The essential nature of the industry BCE stock operates in allows the company to generate substantial cash flows. Being a leader in the Canadian telecom space, its revenues through 5G services will provide a significant boost to its financial performance, translating to potentially greater returns in the coming years.
Foolish takeaway
Creating a well-balanced portfolio that features a good ratio of defensive dividend stocks and growth stocks could be an excellent approach to achieving success as a stock market investor. Ideally, you should initially focus on investing in assets that offer more reliable returns through every market environment.
Once you have a significant safety net, you can start exploring higher-risk investments that also boast the potential for generating greater returns. Fortis stock and BCE stock could be ideal investments for beginner investors.
