Canada markets close in 1 hour 20 minutes
  • S&P/TSX

    -170.21 (-0.84%)
  • S&P 500

    -55.87 (-1.30%)
  • DOW

    -298.55 (-0.88%)

    -0.0030 (-0.38%)

    +0.30 (+0.33%)

    -2,622.31 (-8.62%)
  • CMC Crypto 200

    -33.15 (-6.12%)

    -8.30 (-0.47%)
  • RUSSELL 2000

    -42.78 (-2.14%)
  • 10-Yr Bond

    +0.0960 (+3.33%)

    -259.42 (-2.00%)

    +1.24 (+6.34%)
  • FTSE

    +8.52 (+0.11%)
  • NIKKEI 225

    -11.77 (-0.04%)

    +0.0010 (+0.13%)

2 Safe Stocks Beginners Can Buy for Reliable Passive Income

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·3 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
protect, safe, trust
protect, safe, trust

Written by Robin Brown at The Motley Fool Canada

If you are a beginner investor, buying and owning dividend stocks for passive income can be a great investment strategy. Who doesn’t like collecting cash dividends on a regular basis?

Stocks are a great way to earn reliable and growing streams of passive income

This is especially true when the stock market is incredibly volatile (like it is today). In fact, owning some dividend stocks is a great way to earn a tangible return, regardless of what happens in the stock market.

If you buy stocks in quality, cash-flowing businesses, you have a high chance of reliably receiving your dividend cheques. If you pick the best businesses, you have a high chance of receiving dividends that actually grow over time.

Get income and capital upside

Keep in mind, no dividend is ever 100% certain. Unlike a bond, companies are not legally obliged to pay dividends. However, the benefit of owning a stock is that you own a piece of an actual business.

Not only do you collect dividends, but you also get to enjoy capital appreciation as that business grows. Bondholders don’t get to participate in the compounding effects of a stock.

Owning stocks is one of the best ways to earn passive income and see your capital appreciate over time. If you are looking for some ultra-safe, quality dividend stocks to own for the long run, here are two to consider today.

A top utility with a long history of dividend growth

Fortis (TSX:FTS)(NYSE:FTS) is a great passive-income stock to hold as an anchor in your investment portfolio. It operates a diverse group of regulated power and natural gas transmission utilities in North America. Power and gas are essential in our modern world. Consequently, Fortis earns a reliable stream of cash flows from its heavily regulated assets.

While this business is not growing fast, it is investing in its infrastructure. From this, it is targeting about 6% annual cash flow and dividend-per-unit growth for the next several years. Fortis has a 48-year history of growing its dividend annually. It is one of Canada’s leading Dividend Aristocrats.

Not many companies have that kind of impressive track record. This stock is not cheap. However, it still happens to pay a $0.5275 per share quarterly dividend. On an annual basis, that equals a decent 3.6% dividend yield.

Great TSX stocks for passive income growth
Great TSX stocks for passive income growth

A top telecom for reliable passive income

If you are looking for a more elevated stream of passive income, you may want to consider BCE (TSX:BCE)(NYSE:BCE). With a market capitalization of $57.76 billion, it is Canada’s largest telecommunications services provider.

Being the largest telecom operator provides several advantages such as scale, pricing power, and geographic diversification. Like Fortis, BCE offers essential services like internet and cellular coverage.

It earns relatively consistent annual cash flows that support its attractive 5.88% dividend yield. It pays a $0.92 per share dividend every quarter.

While BCE is not growing very fast, it has a long history of growing its dividends. It has grown its dividend by around 5% annually for the past 10 years. If you are just looking for a reliable passive-income stream to buy, hold, and never sell, BCE stock is as solid as it gets.

The post 2 Safe Stocks Beginners Can Buy for Reliable Passive Income appeared first on The Motley Fool Canada.

Should You Invest $1,000 In BCE?

Before you consider BCE, we think you’ll want to hear this.

Our S&P/TSX market beating* Stock Advisor Canada team just released their timely Best Buys Now to Stock Advisor Canada members, and we’re giving away one of our top 5 “Best Buys Now” stocks for free today.

Want to see if BCE made our list? Get started with Stock Advisor Canada today to receive all 5 of our Best Buys Now, a fully stocked treasure trove of industry reports, two brand-new stock recommendations every month, and much more.

See Our Best Buys Now * Returns as of 6/21/22

More reading

Fool contributor Robin Brown has no position in any of the stocks mentioned. The Motley Fool recommends FORTIS INC.


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