When looking for stocks you can buy and hold for decades, it’s natural to lean toward stocks that have been around for decades. This means mature businesses with decades of successful trading history and, ideally, some other robust credentials.
If you are primarily buying for dividends, one of the most significant endorsements for a stock is the title of an Aristocrat. Three such aristocrats can prove to be promising long-term picks for most Canadian investors.
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A bank stock
Bank of Nova Scotia (TSX:BNS) currently offers the highest dividend yield among the Big Six Canadian bank stocks. At 5.3%, the yield is enough to help you start a $88 monthly passive income with $20,000 invested in this stock. It was significantly higher earlier this year when the stock traded at a discount, but it has gone bullish in the last few months and grown by about 29%, which impacted the yield.
While it’s an Aristocrat like all other bank stocks and offers financially healthy dividends, it also is the country’s second-oldest dividend payer. While it’s a stock you might consider holding on to for decades, especially for its dividends, you may consider waiting for the stock to be rediscounted. On the plus side, buying now will let you ride the bullish trend for at least a while.
A utility stock
The safety of a utility stock’s dividends is not limited to its stellar dividend history but is also tied to the business model itself.
But Canadian Utilities (TSX:CU) shines on both fronts. It enjoys stable revenues as a utility company with over two million consumers, and the bulk of its power is tied to purchase agreements rather than merchant prices (which may offer some volatility). This leads to financially sustainable and consistent revenues.
This is one of the factors behind its stellar dividend history and 51 consecutive years of dividend growth, making it the only Dividend Aristocrat in the country. The stock is bullish, but the yield is still quite decent at 5%. More importantly, it’s arguably the safest dividend stock you can buy in the country and hold for decades.
A telecom stock
Telus (TSX:T) is one of the country’s most promising 5G stocks and one of the three telecom giants. It’s also one of the oldest Aristocrats in the telecom sector and has grown its payouts for 19 consecutive years. Like the rest of the telecom companies in Canada, Telus is also quite heavily discounted right now. Thanks to the 36% discount it’s trading, the yield has been pushed up to 7.3%.
The company has grown its payouts by about 38% in the last five years and is still growing despite the stress on the telecom sector. Meanwhile, another telecom giant is considering pausing dividend growth for a while. This endorsement of the stock’s long-term dividend viability makes it a promising buy-and-hold pick.
Foolish takeaway
The three dividend stocks are worth holding for their dividends, but they are also decent picks from a capital-preservation perspective. Telus and Canadian Utilities might also offer decent capital appreciation in the long term, and the Bank of Nova Scotia might do the same to a lesser extent.
