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3 of the Safest Dividend Stocks in Canada

edit Safety First illustration
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Written by Daniel Da Costa at The Motley Fool Canada

With the economic environment worsening and uncertainty rising in the stock market, many investors are naturally looking to buy some of the best and safest dividend stocks in Canada.

Dividend stocks are typically less risky than non-dividend-paying stocks due to the fact that these companies are well-established and consistently profitable, which is what allows them to return cash to investors in the first place.

And with many companies facing significant headwinds in this environment, it’s essential to buy high-quality and reliable companies that can weather the storm.


It’s important to understand, though, that there is never a 100% guarantee a dividend stock will be safe. However, at the same time, there are some companies with such rock-solid operations that operate in defensive industries, making them some of the safest stocks you can buy.

So, if you’re looking to add some of the safest dividend stocks in Canada to your portfolio, here are three of the best to consider today.

This utility company is one of the safest dividend stocks in Canada

If you’re looking for the safest dividend stocks in Canada to buy for your portfolio, there’s no doubt you should start with a utility stock like Fortis (TSX:FTS).

Fortis is an ideal investment for several reasons, including the fact that it provides essential services and is well diversified.

Utility stocks are well known to be highly defensive. In addition, these stocks typically have highly predictable revenue and earnings — a main reason why they aren’t very volatile.

In fact, Fortis is such a high-quality company that it isn’t just one of the safest dividend stocks in Canada, it’s actually one of the most reliable dividend-growth stocks. Fortis has the second-longest dividend-growth streak of any Canadian company, with an incredible 49 straight years of dividend increases.

So, with the stock offering investors a current yield of more than 4%, it’s certainly one of the best and safest dividend stocks you can buy for your portfolio in this environment.

A highly reliable real estate stock

Another excellent dividend stock that you can buy with confidence is Canadian Apartment Properties REIT (TSX:CAR.UN), the largest residential real estate investment trust (REIT) in Canada.

Residential real estate is one of the most defensive sectors you can invest in. And with CAPREIT’s thousands of units diversified across the country and the company consistently growing its revenue and funds from operations, it’s a highly reliable stock.

Plus, as would be expected by such a high-quality business, just like Fortis, not only is its distribution safe, but it’s also constantly increasing.

CAPREIT is another stock on the Dividend Aristocrats list with over a decade straight of yearly increases to the distribution.

And while it doesn’t offer the same level of yield as Fortis, currently just 3.1%, it does offer more capital gains potential over the long run, as CAPREIT is constantly looking to expand its portfolio and create value for investors.

If you’re looking for the safest Canadian dividend stocks to buy, CAPREIT and other high-quality residential REITs just like it are some of the best to consider.

Infrastructure stocks offer essential services, making them some of the safest investments in Canada

Any company that provides essential services and are therefore much more immune to economic turmoil are often some of the best and safest companies you can buy. For example, Brookfield Infrastructure Partners (TSX:BIP.UN) is a well-diversified company that owns tonnes of reliable and defensive assets all over the world.

Its investments include utilities and other midstream energy assets as well as data centres, telecom towers, railroads, and much more.

Therefore, it’s not surprising that Brookfield is one of the safest dividend stocks in Canada and another company focused on consistently increasing the distribution it pays to investors.

In fact, Brookfield aims to increase its distribution by 5-9% every single year. And today, it offers investors a current yield of roughly 4.75%.

If you’re looking to boost your passive income but want to make sure you’re buying some of the safest stocks in Canada, it’s paramount to find reliable businesses like Brookfield that are well diversified in addition to providing essential services.

The post 3 of the Safest Dividend Stocks in Canada appeared first on The Motley Fool Canada.

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Fool contributor Daniel Da Costa has positions in Brookfield Infrastructure Partners. The Motley Fool recommends Brookfield Infrastructure Partners and Fortis. The Motley Fool has a disclosure policy.