With the economic environment improving and interest rates starting to decline in Canada and the United States, many investors know that now is an excellent time to buy stocks while they’re still undervalued, especially some of the top Canadian dividend stocks.
Higher interest rates have impacted tonnes of stocks across the board. However, generally, higher interest rates tend to impact dividend stocks the most since it can make servicing debt more expensive, which impacts profitability, but also since rising bond yields cause dividend yields to rise and stock prices to fall.
Therefore, while many top dividend stocks still trade off their highs and offer higher-than-normal dividend yields, there’s no question that now is an opportune time to build some positions.
With that being said, though, given the uncertainty that still persists, it’s essential to ensure you’re buying some of the highest quality stocks on the market, ones that you can hold with confidence for years to come.
So, if you’ve got some cash you’re looking to put to work today, here are three of the top dividend stocks Canadians can buy today.
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A reliable utility stock with a 5.5% yield
If you’re looking for top dividend stocks to buy that can earn you significant passive income but you can also hold with confidence, one of the best to consider is Emera (TSX:EMA), the impressive utility stock.
Emera is a great investment because it offers highly essential services, and its operations are regulated by governments, making its future revenue and earnings highly predictable. Plus, its services are well diversified across multiple jurisdictions.
Furthermore, since the stock owns long-life assets that don’t require much maintenance year-over-year, it constantly generates plenty of cash flow, making it an ideal stock for passive income seekers.
It’s been recovering over the last few months. However, it still trades off its 52-week high. Furthermore, its forward dividend yield of 5.5% is below both its 5 and 10-year average yields of 4.95% and 4.8%, respectively, making now an ideal time to initiate a position.
One of the top dividend stocks in Canada
In addition to Emera, another top dividend stock Canadian investors can buy with confidence today is Brookfield Infrastructure Partners (TSX:BIP.UN).
Brookfield is an ideal dividend stock to buy and hold long-term for many of the same reasons as Emera. It owns a portfolio of essential infrastructure assets – including utilities – that are diversified across countries all over the world.
However, while the company owns defensive assets, management runs the business like a growth stock. So, Brookfield is constantly looking at which of its mature businesses to sell off and where it can recycle that capital into new opportunities.
Therefore, when you consider the essential assets it owns, but also the long-term growth potential it has, Brookfield is one of the best stocks you can buy and hold with confidence today. It can protect your capital in times of economic turmoil and grow it in times of expansion.
Not to mention, Brookfield also consistently increases the distribution it pays to investors each year, and currently, its distribution has a yield of 4.7%. So, if you’re looking for top dividend stocks to buy now, Brookfield is certainly one of the best to consider.
A top telecom stock to buy and hold long-term
In addition to a utility stock like Emera, or an infrastructure stock like Brookfield, telecommunications is another excellent industry to find high-quality cash cows that make some of the top dividend stocks.
That’s why investors looking to buy a passive income generator today should consider Telus (TSX:T).
Telecom stocks are ideal businesses to buy and hold long-term for many reasons. Firstly, the industry continues to become more important in our everyday lives, making access to communication essential for most consumers.
In addition, telecom stocks, like utilities, own many long-life assets that don’t require much maintenance year over year. So, Telus is constantly generating billions in cash flow, which it uses to invest in future growth and expand its operations, as well as to fund its dividend.
And with its dividend offering a yield of more than 6.9% today, plus with Telus consistently increasing the dividend each year, there’s no question it’s one of the top dividend stocks that Canadian investors can buy today.
