Canada markets closed
  • S&P/TSX

    20,491.01
    +284.60 (+1.41%)
     
  • S&P 500

    4,088.85
    +80.84 (+2.02%)
     
  • DOW

    32,654.59
    +431.17 (+1.34%)
     
  • CAD/USD

    0.7814
    +0.0005 (+0.07%)
     
  • CRUDE OIL

    114.06
    +1.66 (+1.48%)
     
  • BTC-CAD

    39,035.48
    +256.93 (+0.66%)
     
  • CMC Crypto 200

    686.35
    +443.67 (+182.82%)
     
  • GOLD FUTURES

    1,814.70
    -4.20 (-0.23%)
     
  • RUSSELL 2000

    1,840.30
    +56.87 (+3.19%)
     
  • 10-Yr Bond

    2.9680
    +0.0910 (+3.16%)
     
  • NASDAQ futures

    12,550.00
    -10.25 (-0.08%)
     
  • VOLATILITY

    26.10
    -1.37 (-4.99%)
     
  • FTSE

    7,518.35
    +53.55 (+0.72%)
     
  • NIKKEI 225

    27,046.16
    +386.41 (+1.45%)
     
  • CAD/EUR

    0.7394
    -0.0003 (-0.04%)
     

2 Reliable Dividend Stocks for Generating Passive Income

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·4 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
Various Canadian dollars in gray pants pocket
Various Canadian dollars in gray pants pocket

Written by Nicholas Dobroruka at The Motley Fool Canada

Volatility in the stock market was at record levels in 2021, and I don’t expect that change anytime soon. With no shortage of uncertainty in the stock market today, we’ve already witnessed dramatic price swings in 2022, and we’re barely two weeks into the new year.

As someone whose portfolio skews towards growth stocks, I’m looking to balance that out this year. As a result, I’m in search of a few dependable dividend stocks that could generate passive income for my portfolio on a consistent basis.

I’ve reviewed two dividend stocks that are at the top of my watch list right now. Both companies’ dividends are yielding upwards of 3% at today’s prices.

If generating a new passive-income stream is one of your financial resolutions this year, I’d highly suggest investing in at least one of these two dividend stocks.

Dividend stock #1: Bank of Nova Scotia

If dependability is what you’re after, Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) is the dividend stock for you.

The Canadian bank has been paying a dividend to its shareholders for close to two centuries. It began paying dividends in 1833 and hasn’t missed a year since. On top of that, the company has increased its dividend in 43 of the past 45 years. Good luck trying to find another dividend stock with that type of track record.

In addition to a dependable payout, not many other dividend stocks can match Bank of Nova Scotia’s 4% yield. It’s not only one of the highest-yielding stocks on the TSX, but it’s also the highest among all major Canadian banks.

I won’t argue that the financial sector is anywhere near the most exciting area of the market to be investing in. It is, however, dependable. And if you’re in the process of building a passive-income stream, dependability is exactly what you want.

Dividend stock #2: Sun Life

Sun Life (TSX:SLF)(NYSE:SLF) is another trustworthy dividend stock that passive-income investors will want to have on their radar.

The insurance stock cannot match Bank of Nova Scotia’s payout streak or yield. That being said, not many dividend stocks can. At today’s stock price, Sun Life’s annual dividend of $2.64 per share yields a respectable 3.7%.

Where Sun Life has the edge over Bank of Nova Scotia is growth. Including dividends, Sun Life has largely outperformed the Canadian stock market over the past five years. In comparison, Bank of Nova Scotia has lagged behind the market’s returns in recent years.

Even with Sun Life’s strong growth performance over the past five years, shares are still very reasonably priced. The insurance stock is currently trading at a ridiculously cheap forward price-to-earnings ratio of barely above 10.

If you’re looking for some long-term growth potential alongside a dependable dividend, Sun Life is a top choice.

Foolish bottom line

After experiencing a year of ups and downs in 2021, I’m putting more of an emphasis on passive-income investing this year. I’m looking towards dividend stocks to help balance out the high-growth companies in my portfolio.

If you’re looking to build a passive-income stream through dividend stocks, I’d suggest focusing on companies with high yields and dependable payout track records. And the two companies that I’ve reviewed definitely check off both of those boxes.

The post 2 Reliable Dividend Stocks for Generating Passive Income appeared first on The Motley Fool Canada.

Should you invest $1,000 in Bank of Montreal right now?

Before you consider Bank of Montreal, you may want to hear this.

Motley Fool Canadian Chief Investment Advisor, Iain Butler, and his Stock Advisor Canada team just revealed what they believe are the 10 best stocks for investors to buy right now... and Bank of Montreal wasn't one of them.

The online investing service they've run since 2013, Motley Fool Stock Advisor Canada, has beaten the stock market by over 3X. And right now, they think there are 10 stocks that are better buys.

Learn More Today!

More reading

Fool contributor Nicholas Dobroruka has no position in any of the stocks mentioned. The Motley Fool recommends BANK OF NOVA SCOTIA.

2022

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting