3 Canadian Dividend Stocks for a Steady Income Stream
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Dividend stocks can be a great choice for investors who are looking for assets that can generate stable income. However, to ensure that a company can provide dividend income at a sustainable pace, looking at its long-term growth potential is essential.
In this regard, here are three stocks that investors can consider buying.
Dividend stocks to buy: Fortis
Fortis (TSX:FTS) is a global electricity and gas utilities provider with key markets in Canada, the United States, and the Caribbean nations. This company was established in 1885 and has its headquarters in St. John’s, Canada.
For the current quarter, this stock’s ex-dividend date has been set as May 16, 2023. The dividend amount for each share stands at $0.56 and will be payable on June 1, 2023. Fortis’s dividend yield is a meaningful 3.7% and is supported by a payout ratio of 75.53%.
In early May, Fortis announced the sale of its natural gas facilities in British Columbia. The company will sell 100% of its stake in the Aitken Creek North Gas Storage Facility and a 93.8% stake in the Aitken Creek Natural Gas Storage Facility to a subsidiary of Enbridge (TSX:ENB).
This deal has an approximate value of $400 million and is expected to be finalized by the end of this year. It will help the company strengthen its financial position and allocate additional funds to its future growth plans.
Overall, deals like these, which streamline Fortis’ business, should also provide additional room for the company to grow its dividend over time. For five consecutive decades, Fortis hasn’t missed an opportunity to hike its distribution. That provides an opportunity investors won’t want to pass up.
Enbridge is an energy infrastructure company that started its operations in 1949. Its key markets are in Canada and the U.S. and operates via energy services, power generation, liquids pipeline, gas transmission and distribution segments.
In the latest financial quarter, this company has set its dividend amount at $0.89 per share. The ex-dividend date is May 12, 2023, while the payment date is June 1, 2023. Enbridge’s payout ratio is extremely high at 122.94%, with the stock yielding an impressive 6.8%.
While Enbridge is among the riskier high-yielding dividend stocks from a payout ratio standpoint, the company’s cash flow profile is extremely robust. Thus, while I don’t expect much in terms of dividend growth over the long term, this is a company for investors seeking high yield in this current market environment.
Bank of Nova Scotia
Bank of Nova Scotia (TSX:BNS) is one of Canada’s largest banking and financial services providers. Apart from its home country, this organization also has markets in the U.S., Central America, the Caribbean, Chile, Mexico, etc. It operates via four segments — Canadian banking, global banking and markets, global wealth management, and international banking.
For the latest quarter, this bank had declared a dividend of $1.03 per share, payable thrice a year. The dividend yield stands at 6.2%, while its payout ratio is at 50.26%.
According to data published on March 20, 2023, in the last three years, share prices of this bank have appreciated by 41%. Moreover, in the aforementioned period, this stock’s earnings per share showed a growth of 2% annually. Accordingly, with such a strong earnings-growth profile, there’s a lot to like about this stock as a long-term buy-and-hold opportunity here.