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3 Must-Own Dividend Stocks

Target. Stand out from the crowd
Image source: Getty Images

Written by Chris MacDonald at The Motley Fool Canada

Dividend stocks can provide many incredible benefits to long-term investors. Of course, these companies provide a great source of income for investors. For those heading into, or are in, retirement, that can be a big deal.

However, apart from their monthly, quarterly, or yearly payments, investors can also gain from the appreciation of their stock values. Thus, the potential for higher total return with stocks relative to bonds tends to excite many long-term investors.

Accordingly, no matter what stage you are at in life, investing in dividend stocks is a great way to grow your overall wealth. Here are three of the top options that I think are worth buying right now.

Restaurant Brands

Headquartered in Toronto, Restaurant Brands (TSX:QSR) is a multi-national fast-food restaurant company focused on the Canadian and U.S. markets. Currently, QSR stock provides investors with a dividend yield of 3.5%, and has grown its yield over the past eight years. Thus, from a dividend-growth perspective, there’s a lot to like about this company.

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Restaurant Brands has been able to grow its dividend in large part due to consistent cash flow growth. The company’s earnings last quarter came in just shy of US$1.7 billion, with earnings per share of US$0.72.

Fortis

Fortis (TSX:FTS) is a global electricity and natural gas distribution company that primarily operates in Canada, the U.S., and the Caribbean regions. Its dividend payment for the last quarter is $0.56 per share, which is payable on June 1, 2023. The company’s dividend yield comes in around 3%, with a payout ratio of 79%.

The company’s recent earnings report also provided an encouraging outlook for investors. Fortis brought in US$0.72 in earnings per share (EPS) this past quarter. This was considerably higher than the company’s year-ago quarter, which saw US$0.63 in EPS.

As Fortis continues to benefit from increased prices over the long term (due to its core regulated utilities business), investors stand to reap these gains in the form of higher dividends over time. Fortis has raised its dividend for nearly five decades straight, making this among the best dividend-growth stocks in the world.

Enbridge

Enbridge (TSX:ENB) is an international energy and pipeline company with its headquarters in Alberta, Canada. It has North America’s longest pipeline system and deals in crude oil, natural gas, and liquid hydrocarbons, along with other renewable energy projects.

As with its peers on this list, Enbridge’s strong dividend yield of 6.8% is supported by strong fundamentals. The company has provided investors with a dividend distribution for the past 68 years, with dividends compounding annually at a rate of approximately 10% per year over the past 28 years.

Those looking for a bond proxy have done well holding Enbridge stock over the long term. This remains among the top dividend stocks I would recommend investors at least consider — especially in these uncertain economic times.

The post 3 Must-Own Dividend Stocks appeared first on The Motley Fool Canada.

Free Dividend Stock Pick: 7.9% Yield and Monthly Payments

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Fool contributor Chris MacDonald has positions in Enbridge and Restaurant Brands International. The Motley Fool recommends Enbridge, Fortis, and Restaurant Brands International. The Motley Fool has a disclosure policy.

2023