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Investing in dividend stocks can be a lot more exciting than you think. These stocks give investors the opportunity to create sustainable sources of passive income. That could allow them to supplement their sources of primary income and perhaps eventually put themselves in a position where they don’t need to rely on their jobs to maintain their everyday lives. If you’re interested in adding dividend stocks to your portfolio, here are three stocks you may love!
This stock does a great job of raising its dividend each year
When looking for dividend stocks to invest in, you should focus on proven blue-chip companies. These are companies that are well established and listed as leaders in their respective industries. An easy way to find blue-chip Canadian companies would be to consult the S&P/TSX 60. As the name suggests, this is a list of 60 Canadian stocks that are leaders in important Canadian industries.
Among those companies is Fortis (TSX:FTS). This is one of the top utility companies in North America. It serves more than three million customers across Canada, the United States, and the Caribbean. Fortis is well-known among dividend investors because of its outstanding history of raising its distribution. With 49 years of continuous dividend raises, Fortis holds the second-longest active dividend-growth streak in Canada. The company plans to raise its dividend through to 2028 at a rate of 4-6%.
A stock that has a fast dividend-growth rate
Another factor that investors should consider is how fast a company can raise its dividend. In my opinion, you should be holding stocks that raise their dividend at a rate of 2% or greater. That allows your source of passive income to beat the inflation rate over the long term, allowing you to maintain or gain more buying power over time.
goeasy (TSX:GSY) is one of my favourite stocks in that regard. For those who aren’t familiar with this company, you should know that it operates two distinct business lines. easyhome sells furniture and other home goods on a rent-to-own basis, and easyfinancial provides high-interest loans to subprime borrowers. Since 2014, goeasy has managed to raise its dividend at a compound annual growth rate of about 31%. That outpaces the inflation rate by a wide margin.
This company has been paying shareholders for nearly two centuries
Finally, there are some great companies out there that are unable to raise dividends each and every year but would still be worthwhile to hold in your portfolio. For instance, if a company is known for paying shareholders for many years without issue, then it could be nice to hold that stock in your portfolio as a way of bolstering the income you receive.
Take Bank of Nova Scotia (TSX:BNS), for example. This company has been paying shareholders dividends since 1833. That represents 190 years of continued dividend payments. Today, Bank of Nova Scotia stock offers investors a forward dividend yield of 7.06%. That gives you tremendous value for your money and should make Bank of Nova Scotia an appealing option for any dividend investor.