Almost every investor has their own set of no-brainer stocks — i.e., stocks they may revert to when they can’t think of anything else to buy. These no-brainer stocks are also among their top picks whenever the market crashes or whenever they become reasonably discounted. However, some TSX stocks are no-brainer picks for a massive range of Canadian investors.
A utility stock
Fortis (TSX:FTS) is easily one of Canada’s most revered utility stocks, particularly for its dividends. Its desirability is rooted in several things, including its business model, business reach, dividend history, and the combination of dividend and capital appreciation-based return potential it offers.
As a utility stock with stable revenues, it’s a no-brainer dividend pick because its dividends tend to be financially stable like most other utility operations. This notion is endorsed and significantly enhanced by its stellar dividend history.
Fortis has grown its payouts for 49 consecutive years, and it’s just one year shy of becoming Canada’s second Dividend King, making it one of the elitist picks in an already elite club (Dividend Aristocrats).
It has a diversified operational portfolio – ten utility operations in multiple countries, and 99% of its utility assets and operations are regulated, further enhancing its revenue stability. If we combine that with its massive consumer base of 3.5 million consumers, it’s an operationally attractive business as well.
However, all of these are the fundamental strengths that make it a compelling buy in virtually any given market. The reason to lean towards this stock now is the 14% discount it’s trading at and which is shrinking fast as the stock goes up. This discount has pushed the yield up to an attractive number of 4.25%.
An energy stock
There are several amazing dividend payers among the energy stocks, but the leader of the sector (in market capitalization) and one of the largest pipeline companies in the world, Enbridge (TSX:ENB), is one of the top dividend picks from the energy sector in Canada for a number of reasons.
The first reason is its business model. The energy transportation business (pipelines) and utilities are two significant segments of its business, and they ensure that the bulk of its revenues are as stable as the revenues of a typical utility business.
Its stellar dividend history is another reason to buy Enbridge for its dividends. It has been growing its payouts for close to three consecutive decades, making it one of the oldest Aristocrats in the energy sector.
Lastly, the stock is currently modestly discounted and trading at 15% below its peak value. This has beefed up the yield to 7.3%, but the rate at which the stock is recovering may soon fall below 7%, making now a good time to consider this stock.
Foolish takeaway
The two dividend stocks are among the safest the TSX has to offer. They have maintained their dividend-growth streak through some incredibly rough markets and weak economies and have proven their mettle. They are also offering healthy yields right now that are shrinking as the stocks go bullish. All these factors combined make the two no-brainer stocks worth buying right now.
