The 3 Safest Dividends Right Now

Despite recession fears, these three safe dividend stocks could help Canadian investors get regular income.

| More on:
protect, safe, trust

Image source: Getty Images

The stock market has started the second half of the year under the dark cloud of a potential recession. In such a market condition, buying some fundamentally strong dividend stocks could reduce risks to your overall portfolio. While all dividend stocks may not guarantee outstanding returns in the short term, they could still deliver regular income for you to reinvest in stocks and generate handsome returns on your investments in the long run.

In this article, I’ll talk about three of the safest dividend stocks that Canadian investors can buy right now.

IGM Financial stock

IGM Financial (TSX:IGM) is a Winnipeg-based wealth and asset management firm with a market cap of about $8.3 billion. The company makes most of its revenue from its wealth management segment, and it had about $255.8 billion worth of total assets under management and advisement at the end of May. After posting 32% gains in 2021, its stock has dived by nearly 24% this year so far to $34.77 per share. The stock offers an attractive dividend yield of around 6.5%, which translates into an annual dividend of $2.25 per share.

In 2021, IGM Financial’s adjusted earnings reached a new record of $4.05 per share, showcasing a solid 26.6% YoY (year-over-year) positive growth with the help of record-high sales, positive investment returns, and higher earnings contribution from its strategic investments. Amid rapidly rising interest rates, its fixed-income strategies are likely to perform well and help it keep its strong earnings–growth trend intact.

Power Corporation of Canada stock

Power Corporation of Canada (TSX:POW) is also a reliable dividend stock to consider right now. This Montréal-based management and holding company focuses on providing financial services across North America, Europe, and Asia.

Interestingly, Power Corporation has nearly 61.6% stakes in IGM Financial and about 66.6% in the insurance firm Great-West Lifeco through its wholly owned subsidiary Power Financial. Power Corporation stock currently trades at $33.33 per share after sliding by more than 9% in June. The stock offers an attractive dividend yield of around 5.9% at the moment.

Last year, Power Corporation’s total revenue jumped by 7.7% YoY to $69.6 billion with the help of a surge in its total net premiums and fee income. Despite its rising expenses, the company posted a solid 59% YoY jump in its adjusted earnings for the year to $4.77 per share. Going forward, Power Corporation’s insurance business might benefit from a higher interest rate environment, making it one of the safest dividend stocks to buy in Canada right now.

BCE stock

BCE (TSX:BCE)(NYSE:BCE) could be another safe dividend stock pick to consider right now. At the end of May, the shares of this Verdun-based communication giant were trading with 5% gains in 2022. However, the recent broader market selloff took its shares down by more than 8% in June, and it now trades with nearly 3% year-to-date losses. BCE stock has a decent annual dividend yield of 5.4%.

After posting a 5.6% YoY jump in its adjusted earnings in 2021, BCE’s earnings-growth rate is likely to accelerate in the ongoing year, as the demand for its broadband and 5G services is expected to continue growing, despite recession fears, which should help its stock recover fast. That’s why long-term investors may want to consider buying this safe dividend stock right now.

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.

The Motley Fool has no position in any of the stocks mentioned. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

More on Dividend Stocks

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 »

calculate and analyze stock
Dividend Stocks

This 5.5% Dividend Stock Pays Cash Every Single Month!

This REIT may offer monthly dividends, but don't forget about the potential returns in the growth industry its involved with.

Read more »

Silver coins fall into a piggy bank.
Dividend Stocks

How to Use Your TFSA to Earn up to $6,000 Per Year in Tax-Free Passive Income

A high return doesn't mean you have to make a high investment -- or a risky one -- especially with…

Read more »

path road success business
Dividend Stocks

2 High-Yield Dividend Stocks to Buy Hand Over Fist and 1 to Avoid

High yields are great and all, but only if returns come with them. And while two of these might, another…

Read more »

Man holds Canadian dollars in differing amounts
Dividend Stocks

This 7% Dividend Stock Pays Cash Every Month

A high dividend yield isn't everything. But when it pays out each month and offers this stability, it's worth considering!

Read more »