Many investors, including me, aim to build portfolios that could help sustain them through retirement. One way to do that is by investing in dividend stocks. These stocks will pay investors on a recurring basis simply for holding shares in a company. At a certain portfolio size, investors will be able to completely live off the dividends they generate in their portfolios.
For example, if you have a $1 million investment portfolio that yields 4% each year. You would receive $40,000 per year. Theoretically, if you choose the right dividend stocks to hold in your portfolio, that payout could even increase over time.
In this article, I’ll discuss two great dividend stocks that investors should buy today. These two stocks could pay you for life.
My top dividend stock
As far as dividend stocks go, Bank of Nova Scotia (TSX:BNS) holds the largest position in my portfolio. This is a company that many Canadians should be very familiar with. It’s one of the Big Five Canadian banks. It ranks in the top five in terms of assets under management, market capitalization, and revenue.
To me, Bank of Nova Scotia stands out among its peers because of its international presence. Bank of Nova Scotia is strategically positioned within the Pacific Alliance. That’s a region that includes Chile, Columbia, Mexico, and Peru. It’s estimated that the economy in those countries could see much faster growth than Canada’s over the coming years. If that’s true, then Bank of Nova Scotia could see a similar growth in its business.
In terms of its dividend, I find Bank of Nova Scotia very impressive. It first paid shareholders a dividend on July 1, 1833. Since then, the company has never missed a dividend payment. That means Bank of Nova Scotia is about to go on 191 consecutive years of dividend distributions. I’m confident that the company could continue to pay shareholders for many years to come.
One of the best dividend stocks in Canada
Fortis (TSX:FTS) is the second dividend stock that I think could pay you for life. This company provides regulated gas and electric utilities to more than three million customers across North America. What should intrigue investors regarding this company is its business model. Because utilities tend to be paid each month, companies like Fortis are able to take advantage of a very predictable and stable source of revenue.
Fortis uses that predictable cash flow to plan dividend raises years in advance. In fact, the company has already guided for 4% to 6% annual increases in its dividend through to 2028. That could extend its dividend-growth streak to 55 years. Speaking of which, Fortis’s current 50-year dividend-growth streak, ranks as the second-longest active streak of its kind in Canada.
A bona fide Canadian Dividend Aristocrat, I believe Fortis could continue to pay shareholders for many more years.
