Canadian stocks are trading on a strong note in 2024 as investors continue to speculate about the timing of upcoming potential interest rate cuts in the near term. While the Bank of Canada and the U.S. Federal Reserve at the end of 2023 hinted towards multiple rate cuts in the near term, persistent inflationary pressures have cast a shadow of doubt over the possibility of such policy actions in the next few months.
This is one of the key reasons why many investors seem confused right now about whether to invest in growth or value stocks amid the uncertain economic outlook. However, one of the best ways to hedge against this uncertainty could be to invest in some safe Canadian dividend stocks that usually offer stable and growing income regardless of the market conditions. Here are two of the smartest Canadian dividend stocks you can buy right now with a modest investment of just $500.
Manulife Financial stock
Manulife Financial (TSX:MFC) has been one of the most consistent performers on the Toronto Stock Exchange in the last four years. After ending the previous three years in the green territory, the shares of this Toronto-headquartered global financial services giant have already gone up by more than 22% so far in 2024 to currently trade at $35.79 per share with a market cap of $64.3 billion. MFC distributes its dividend payouts every quarter and offers a decent 4.4% annualized dividend yield at the current market price.
In the first quarter of 2024, Manulife registered a solid 19% YoY (year-over-year) increase in its adjusted earnings to $0.94 per share, also exceeding Street analysts’ expectations. During the quarter, the company’s core earnings rose 16% from a year ago to around $1.8 billion due mainly to robust business performance across its insurance segments and higher fee income within its global wealth and asset management division.
Another key factor that makes Manulife a safe dividend stock to hold for the long term is its solid capital position, which allows it to support growth initiatives and return value to shareholders. Notably, it has raised its dividends for the last 10 consecutive years.
Enbridge stock
Enbridge (TSX:ENB) could be another large-cap Canadian dividend stock you can add to your long-term portfolio with less than $500. After sliding by 9.9% last year, ENB stock has recovered by 3.4% to currently trade at $49.33 per share with a market cap of $105 billion. However, the recent declines in its share prices have made the annualized dividend yield of the Calgary-headquartered energy giant even more appealing, now standing at around 7.4%.
The Canadian oil and gas transportation company reported a strong 8.2% YoY jump in its first-quarter adjusted earnings to $0.92 per share, beating Street analysts’ estimates of $0.81 per share by a healthy margin. During the quarter, Enbridge also completed the acquisition of The East Ohio Gas Company for US$6.6 billion in an effort to improve its presence in the U.S. gas utility market.
Besides its strong financials and solid growth prospects, the fact that this Canadian dividend stock has been raising its dividend payouts for 29 consecutive quarters makes it really attractive for income-seeking investors.
