Canadian investors seeking dividend stocks often forget to pay attention to another key factor. That factor is returns. Sure, you could bring in significant dividends, but that doesn’t exactly matter if revenue if shrinking.
After all, dividends have to come from someplace. So, if a company isn’t making money, you can all but guarantee that dividend won’t last forever. Yet, in the case of these three dividend stocks, they’re solid companies that investors can get in on right now. And what’s more, hold onto that passive income for life.
Manulife
If you’re looking for a solid dividend stock, then Manulife Financial (TSX:MFC) should be at the top of that list. Manulife stock has a track record of strong financial performance, which is essential for maintaining dividend payments. Their stable earnings and revenue growth provide a reliable foundation for dividend payouts.
Furthermore, Manulife stock also boasts a consistent history of paying dividends, which is reassuring for investors seeking income. Manulife has a commitment to returning capital to shareholders, often through regular dividend payments. This is supported by its business model.
Manulife stock operates across various segments within the financial services industry, including insurance, wealth management, and asset management. This diversification helps mitigate risks associated with any single sector’s performance, potentially safeguarding dividend payments. It’s also a global company, creating even more diversification.
So, with shares up 37% in the last year, a strong 64% payout ratio, and a 4.5% dividend yield, it’s certainly a dividend stock to buy now.
Fortis
Another strong company to consider is Fortis (TSX:FTS), a cash-gushing powerhouse of a dividend stock that now also holds Dividend King status. This means it’s increased its dividend each year for the last 50 years!
That dividend has been supported by a stable and predictable business model in the utilities sector. Fortis stock operates as a regulated utility company primarily involved in the generation, transmission, and distribution of electricity and gas. These are essential services that exhibit relatively stable demand regardless of economic conditions, providing a dependable revenue stream to support dividend payments.
As mentioned, Fortis stock has a long history of paying dividends and has consistently increased its dividends over many years. This track record demonstrates the company’s commitment to returning capital to shareholders and its confidence in its ability to generate sufficient cash flows to sustain and grow dividends.
Finally, not only does the company offer diversification, but a regulated environment. The majority of Fortis’s assets are regulated, meaning that its rates and revenue are overseen and approved by regulatory authorities. This regulatory framework provides a level of predictability and stability to Fortis’s earnings, reducing risk and enhancing the reliability of dividend payments.
So, yet again, we have a strong dividend stock that offers value and growth. Granted, shares are still down 3.5% in the last year as of writing. However, it holds a 74% payout ratio with a 4.22% dividend yield. What’s more, shares have climbed 12% since 52-week lows.
