I always advise new investors to focus on dividend stocks. This is because dividend stocks tend to be more established (or even blue-chip) companies. This contrasts to growth stocks, which tend to be much newer companies. This distinction is important, because established companies should already have steady revenue and a market-leading position within their industry. As a result, established companies tend to have less-volatile stocks, as investors generally know what to expect on a day-to-day basis.
Start with this top stock
When looking at Canadian dividend stocks, Fortis (TSX:FTS) should always be one of the first candidates. This is company provides regulated gas and electric utilities to more than three million customers across Canada, the United States, and the Caribbean. Because utility companies tend to have very stable businesses, their revenue streams are very predictable. This allows companies like Fortis to plan dividend distributions ahead of the payment date.
Fortis is listed as a Canadian Dividend Aristocrat. However, it should be noted that this company stands among the elite in that group. Fortis has managed to increase its dividend in each of the past 49 years. Considering how many periods of market uncertainty have occurred over that time, this achievement should speak volumes about the company’s capital-allocation strategy. Fortis has already announced its plans to continue raising its dividend at a rate of 4-6% through to 2027.
With a forward dividend of 3.93%, there seems to be more reasons to buy this stock than not.
This stock has been paying a dividend for nearly two centuries
New investors should also consider buying shares of Bank of Nova Scotia (TSX:BNS). Listed as a Big Five bank, this is one of the most prominent companies in Canada. In my opinion, it stands out from its peers due to its focus on international growth. In fact, with over 2000 branches across 50 countries, Bank of Nova Scotia is well known for being Canada’s most international bank.
Of that aspect of its business, Bank of Nova Scotia’s exposure to the Pacific Alliance should be noted. That’s a region which includes Chile, Columbia, Mexico, and Peru. Economists forecast that the region should see greater growth over the coming years compared to the markets in North America due to a rapidly growing middle class.
In terms of Bank of Nova Scotia’s dividend, this stock stands out. The company first paid shareholders a dividend on July 1, 1833. Since then, it has never missed a dividend distribution. That represents nearly 190 years of continued dividend distributions. Bank of Nova Scotia stock should be very attractive to investors today, as it offers a forward dividend yield of 6.27%.
Foolish takeaway
If you’re interested in dividend stocks, the Canadian stock market offers many outstanding companies. In my opinion, Fortis and Bank of Nova Scotia stand among the best in that regard. Both companies have very stable businesses and a long history of distributing dividends. New investors should take advantage of these great companies in March 2023.
