Many Canadians have started becoming stock market investors to achieve their dreams of financial freedom. The ability to accumulate enough wealth so your money works for you is a possibility if you take a disciplined approach to stock market investing. Dividend investing is one of the most popular ways to create another income stream that can help you grow your wealth.
Finding and investing in a portfolio of high-quality dividend stocks can provide you with some extra income through shareholder dividends. You can use the dividend income to pay for expenses each month. If you don’t need to supplement your monthly income, you can reinvest the shareholder dividends to unlock the power of compounding and accelerate your wealth growth.
Choosing reliable income-generating assets with the potential to provide you with safe and virtually guaranteed dividend income is not easy. Not all dividend-paying stocks can sustain regular payouts.
It pays to take your time to do your due diligence and add stocks with a long-term track record for paying their investors their dividends. The company also needs to boast the potential to generate the kind of income necessary to sustain those payouts.
I will discuss two such dividend stocks you can consider adding to your portfolio for this purpose.
Fortis
Fortis (TSX:FTS)(NYSE:FTS) is a $29.08 billion market capitalization utility holdings company headquartered in Canada that owns and operates several utility businesses across Canada, the U.S., and the Caribbean.
It provides electricity transmission and natural gas utility services to over 3.4 million customers. Fortis generates almost all of its revenue through regulated utility assets, virtually guaranteeing stable cash flows.
Fortis stock trades for $60.16 per share at writing, and it boasts a 3.56% dividend yield. Despite the resilient nature of its underlying businesses, Fortis stock is down by 7.52% from its all-time high in May 2022, inflating its shareholder dividends.
The Canadian Dividend Aristocrat has been raising its shareholders’ dividend for the last 48 years. Its capital investment programs position it well to continue delivering further dividend hikes for years to come.
Canadian National Railway
Canadian National Railway (TSX:CNR)(NYSE:CNI) is a $102.98 billion market capitalization Canadian railway company that boasts an extensive railway network spanning 19,600 miles of track. The company’s network connects North America from coast to coast, spanning from Chicago to the Gulf of Mexico.
Canadian National Railway stock trades for $146.97 per share at writing, and it boasts a 1.99% dividend yield. It might not boast high-yielding shareholder dividends. However, Canadian National Railway has garnered the reputation of being a reliable dividend stock.
Its excellent track record is evidenced by its status as a Canadian Dividend Aristocrat. CNR stock has raised its shareholder dividend for 25 years, and it looks well positioned to continue doing so comfortably in the coming years.
Foolish takeaway
Creating a passive-income stream that can supplement your active income streams takes a lot of time, patience, and discipline. You need to build a large dividend income portfolio to achieve that goal. Creating a mixture of high-quality dividend stocks with reliable shareholder dividends can help you get there.
Investing in Canadian Dividend Aristocrats like Fortis stock and Canadian National Railway stock could be an excellent method to set the foundations for such an income-generating portfolio.
