The S&P/TSX Composite Index is down by 14.45% from its 52-week high as of this writing, as it remains volatile this year. Stock market investing is inherently risky due to the volatile nature of equity securities. However, the TSX boasts several high-quality dividend stocks that can deliver more reliable returns on your investments in various market environments.
Stock markets have a cyclical nature, and there are bound to be ups and downs in the economy. Canadians with a long investment horizon can use the downturns to their advantage by identifying and investing in high-quality dividend stocks to capture higher yields. When the underlying business is strong, it has the potential to remain resilient during stock market crashes.
Buying and holding these stocks means that the long-term returns dwarf the short-term losses during downturns. Today, I will discuss three stable dividend stocks you can add to your portfolio for relatively safer and stable returns through shareholder dividends.
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BCE
BCE (TSX:BCE)(NYSE:BCE) is a $56.84 billion market capitalization giant in the Canadian telecom space. It is the biggest telecom company in a largely consolidated industry, putting it in an excellent position to dominate the market share.
The company boasts a strong balance sheet than its peers, and it looks well positioned to beat them in the 5G rollout. BCE’s investments to aggressively expand and bolster its network infrastructure over the last few years will likely result in accelerated financial growth in the coming years.
As of this writing, BCE stock trades for $62.33 per share and boasts a juicy 5.90% dividend yield. It is a Canadian Dividend Aristocrat with a 13-year dividend-growth streak. It is a low-risk business due to the essential nature of its services, making it a relatively safer investment.
Fortis
Fortis (TSX:FTS)(NYSE:FTS) is a $26.94 billion market capitalization utility holdings company that owns and operates several natural gas and electric utility businesses across Canada, the U.S., Central America, and the Caribbean.
The company operates in a highly regulated environment, relying primarily on long-term contracted assets to generate revenues. Its business model allows Fortis to create predictable cash flows that it can use to fund its capital programs and grow its shareholder dividends.
As of this writing, Fortis stock trades for $56.27 per share and boasts a 3.80% dividend yield. It is also a Canadian Dividend Aristocrat, with a 48-year dividend-growth streak. The company’s low-risk nature and essential services make it a safe investment for investors seeking stability in an uncertain market environment.
Royal Bank of Canada
Royal Bank of Canada (TSX:RY)(NYSE:RY) is Canada’s largest bank by market capitalization and the biggest publicly traded company on the TSX for the same reason.
The $177.16 billion market cap financial institution is a resilient business that has been around since 1864, and it was one of the first dividend-paying companies in Canada. Without fail, it has paid its shareholders a portion of its profits for the last 152 years.
RBC stock had to freeze its dividend hikes during the 2008 financial crisis. Since then, it has delivered growing shareholder dividends yearly. As of this writing, RBC stock trades for $124.98 per share and boasts a 4.10% dividend yield. It could be another excellent long-term, buy-and-hold investment for all market environments.
Foolish takeaway
The ups and downs caused by volatile market environments can become irrelevant when you invest for the long term, provided you can identify the right buy-and-hold assets. BCE stock, Fortis stock, and RBC stock are at the top of their respective industries.
All three businesses boast solid operations, excellent financial performances, and the ability to continue paying shareholder dividends in harsh economic environments. These three dividend stocks can be excellent additions to your self-directed portfolio.
