Buying the right Canadian dividend stocks can mean the difference between retiring early or needing to work an extra few years. It’s no secret that the income earned from dividend stocks can become a pensioner’s best friend. But what stocks should investors turn to today for long-term growth?
Here’s a look at three outstanding Canadian dividend stocks that really are a pensioner’s best friend.
Starting with just a 4% yield
Fortis (TSX:FTS) is one of the most defensive stocks on the market. Part of the reason for that stems from the lucrative yet very stable business model that Fortis adheres to. Specifically, that business model involves long-term, regulated contracts, which provide Fortis with a recurring and stable revenue stream.
That revenue stream allows the company to invest in growth initiatives and pay out a very handsome dividend.
As of the time of writing, Fortis’s quarterly dividend works out to a respectable 4.25%. While that might not seem like the highest-yielding dividend on the market, it is well covered and continues to grow.
In fact, Fortis is one of just two companies on the market that has provided investors with annual bumps to that dividend for over 50 consecutive years. Fortis has committed to continuing that tradition over the next few years.
That fact alone makes Fortis a pensioner’s best friend. It’s also one of the reasons why, in a market full of volatility, Fortis is one of only a few companies trading up this year. As of the time of writing, Fortis is trading up 7% over the trailing 12-month period.
Banking on a recovery and a strong income
It would be nearly impossible to list out Canadian dividend stocks that are a pensioner’s best friend without mentioning at least one of the big banks. And Canadian Imperial Bank of Commerce (TSX:CM) is an option that should be on the radar of all investors.
CIBC isn’t the largest of Canada’s big banks. In fact, it’s one of the smaller big banks. That doesn’t stop the bank from being a stellar long-term investment option.
As of the time of writing, CIBC is down nearly 14% over the trailing 12-month period. This makes the bank an excellent option for investors with long-term horizons. Part of the reason for that drop can be traced back to overall market volatility amid rising interest rates.
Specifically, interest rates have put CIBC’s domestic mortgage book under pressure and, as a result, have made the stock more volatile. But prospective investors should remember that Canada’s big banks have historically fared better than their U.S. counterparts during downturns, emerging stronger.
Until that eventual recovery does happen, prospective investors can buy CIBC at a significant discount and enjoy the insane 7.18% yield.
A pensioner’s best friend: Steady increases and a high yield
One final dividend stock that is a pensioner’s best friend to consider is Telus (TSX:T). Telus is one of the largest telecoms in Canada offering a bevy of subscription-based offerings to customers across the country.
Specifically, this includes wireless wired internet and TV segments. Telecoms are historically viewed as defensive investments, and that position has only grown since the pandemic started. This is because there are still many who work and study in a remote or hybrid capacity. This is made the need for a fast internet connection to be one of a necessity.
As an income-producing stock, Telus really shines. The company offers a quarterly dividend which as of the time of writing, works out to an impressive 6.52% yield. Telus also has an established cadence of providing annual or better increases to that dividend that goes back well over a decade.
In short, Telus is a superb long-term option that has a defensive moat and a juicy yield, making it a pensioner’s best friend.
