I know what you’re thinking. How can I be so sure that these dividend stocks will be around all your life? It’s because they’ve been around for far longer than you have been already. What’s more, they’ve been increasing their dividend that entire time. Today, we’re going to look at these two dividend stocks and what investors could make should they buy today.
Canadian Utilities
Canadian Utilities (TSX:CU) is the only company on the TSX right now that currently is a Dividend King by American standards. This means the company has been increasing its dividend for 50 consecutive years! So, even if you’re 50 now and expect to live to 100, the company has already proven it can increase the dividend year after year for the rest of your life.
Canadian Utilities stock is also a great defensive stock as you age. The company provides a stable set of dividends because it’s in the utility sector. What’s more, this includes both natural gas and renewable energy sources. So, as the world shifts to renewable energy, Canadian Utilities stock will still be around to shift in that direction as well.
Right now, Canadian Utilities stock trades at just 14.01 times earnings as of writing. It also offers up a 5.64% dividend yield for investors. This means great dividends for an even great price — especially with shares still down 23% in the last year.
Fortis stock
Another great utility stock, Fortis (TSX:FTS) is the other long-term hold, and for many of the same reasons. Fortis stock is just shy of also becoming a Dividend King. So, again, you can look forward to that 50 years of consecutive dividend growth for as long as you live.
As with Canadian Utilities stock, Fortis stock has become a great purchase by way of organic and acquisition growth. The company brings in its stable revenue, uses it to acquire more businesses, and then puts those businesses to work to create more revenue. It’s a process that’s worked for decades.
Fortis stock isn’t as valuable these days as Canadian Utilities stock, but it’s just as stable. It trades at 18.64 times earnings as of writing, with a 4.15% dividend yield. Shares are down 13% in the last year as well.
Bottom line
Canadian Utilities stock has increased by 128% in the last 20 years for its investors. Meanwhile, Fortis stock has increased 260% in that time. So, despite the recent drop, there is reason to invest long-term in these stocks — especially as they’re both dividend stocks.
Let’s say you invested $20,000 into each of these stocks today. That would mean Canadian Utilities stock could increase that $20,000 by 128% to $51,200 in 20 years. Further, it would mean Fortis stock could increase that $20,000 by 260% to $128,000 in that time!
And in the meantime, you’ll be collecting dividends again and again. This can be used to pay down debt or reinvest! As of writing, here is what you could get in dividend income from a $20,000 investment in both companies.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY |
| CU | $32 | 625 | $1.79 | $1,118.75 | Quarterly |
| FTS | $54 | 370 | $2.26 | $836.20 | Quarterly |
As you can see, these investments will surely do you well over the next 20 years. With dividends and growth taken into consideration, they look like a steal on the TSX today.
