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My 2 Favourite Canadian Dividend Stocks for Wealth in the Long Run

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Written by Adam Othman at The Motley Fool Canada

After another drastic dip in recent weeks, the S&P/TSX Composite Index is down by 5.3% from its 52-week high. Amid all the market volatility, investing in high-risk growth stocks is not everybody’s cup of tea. If you are a risk-averse investor, there are other ways to put your money to work in the stock market.

Despite the weakness of the Canadian benchmark index, Canadian investors have plenty of excellent opportunities to explore. By identifying and investing in the right dividend stocks, you can generate a passive income that keeps providing returns regardless of market circumstances. High-quality dividend stocks with strong underlying businesses can continue paying shareholders even in bear markets.

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However, not every dividend stock fits the bill as a reliable income-generating asset. Today, I will discuss two of my top long-term picks for dividend investors to consider on the TSX.

Enbridge

Enbridge Inc. (TSX:ENB) is a $98.7 billion market capitalization multinational pipeline and energy company. Headquartered in Calgary, Enbridge owns and operates an extensive network of pipelines transporting crude oil, natural gas, and natural gas liquids across Canada and the US.

Responsible for transporting a significant chunk of energy products used in North America, Enbridge is an essential business for the region.

While energy stocks are tricky due to a recession potentially decreasing demand, Enbridge stock is well-positioned to weather any incoming storms.

Relying primarily on fuel volume distributed across North America, changing fuel prices do not negatively impact the stock of Enbridge as much as that of other energy companies. As it continues building a strong renewable energy portfolio, Enbridge stock is also preparing for a future in a greener energy industry.

As of this writing, Enbridge stock trades for $48.85 per share and boasts a juicy 7.27% dividend yield that it pays at a quarterly schedule.

BCE

As the top 5G provider in Canada, BCE Inc. (TSX:BCE) is another stalwart dividend stock to consider. The $56.3 billion market capitalization Canadian giant is the biggest player in Canada’s largely consolidated telecom industry. Controlling much of the market, it is an essential business that dominates its peers through its sheer size.

As the company continues to expand its 5G+ capabilities into new markets, it looks well-positioned to navigate the macroeconomic uncertainty in a better position than many others. Having paid its investors their dividends for well over a century, it also boasts an impressive track record as a top dividend stock.

As of this writing, BCE stock trades for $61.87 per share, boasting a juicy 6.26% dividend yield that it pays on a quarterly schedule.

Foolish takeaway

High-yielding payouts are typically alarming. However, some dividend stocks are well-capitalized enough to comfortably fund shareholder dividends. If the underlying company is strong enough, it can keep paying its investors regardless of share price declines during recessions and bear markets.

While not without risks, as industry leaders in their respective sectors, Enbridge stock and BCE stock can be considered reliable dividend stocks to consider.

The post My 2 Favourite Canadian Dividend Stocks for Wealth in the Long Run appeared first on The Motley Fool Canada.

Should You Invest $1,000 In BCE?

Before you consider BCE, you'll want to hear this.

Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in May 2023... and BCE wasn't on the list.

The online investing service they've run for nearly a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 23 percentage points. And right now, they think there are 5 stocks that are better buys.

See the 5 Stocks * Returns as of 5/24/23

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Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy.

2023