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the S&P/TSX Composite Index it is down 14.45% from its 52-week high as of this writing as it remains volatile this year. Investing in the stock market is inherently risky due to the volatile nature of equity securities. However, the TSX has several high-quality dividend stocks that can generate more reliable returns on your investments in various market environments.
Stock markets are cyclical in nature, and there are likely to be ups and downs in the economy. Canadians with a long-term investment horizon can take advantage of recessions by identifying and investing in high-quality dividend stocks to capture higher returns. When the underlying business is strong, it has the potential to remain resilient for stock market crashes.
Buying and holding these stocks means that long-term returns dwarf short-term losses during recessions. Today, I’m going to look at three stable dividend stocks that you can add to your portfolio to earn relatively safer and more stable returns through shareholder dividends.
BC
BC (TSX:BCE)(NYSE:BCE) is a $56.84 billion market cap giant in the Canadian telecommunications space. It is the largest telecommunications company in a largely consolidated industry, putting it in a great position to command market share.
The company has a stronger balance sheet than its peers and appears well positioned to beat them in the 5G rollout. BCE’s investments to aggressively expand and strengthen its network infrastructure in recent years will likely result in accelerated financial growth in the coming years.
At the time of writing, BCE shares are trading at $62.33 per share and boasting a hefty dividend yield of 5.90%. He is a Canadian Dividend Aristocrat with a 13-year dividend growth streak. It is a low-risk business due to the essentiality of its services, which makes it a relatively safer investment.
fortress
fortress (TSX:FTS)(NYSE:FTS) is a $26.94 billion market capitalized utility holding company that owns and operates various natural gas and electric utility businesses in Canada, the US, Central America and the Caribbean.
The company operates in a highly regulated environment and relies primarily on long-term contracted assets to generate income. Its business model allows Fortis to create predictable cash flows that it can use to fund its capital programs and increase dividends for its shareholders.
At the time of this writing, Fortis stock is trading at $56.27 per share and boasts a dividend yield of 3.80%. He’s also a Canadian Dividend Aristocrat, with a 48-year dividend growth streak. The company’s low-risk nature and essential services make it a safe investment for investors seeking stability in an uncertain market environment.
Royal Bank of Canada
Royal Bank of Canada (TSX:RY)(NYSE:RY) is Canada’s largest bank by market capitalization and the largest publicly traded company on the TSX for the same reason.
The financial institution with a market capitalization of $177.16 billion is a resilient business that has been around since 1864, and was one of the first dividend-paying companies in Canada. Without fail, it has paid its shareholders a portion of its profits for the past 152 years.
RBC shares had to freeze its dividend increases during the 2008 financial crisis. Since then, it has delivered increasing dividends to shareholders every year. At the time of writing, RBC shares are trading at $124.98 per share and have a dividend yield of 4.10%. It could be another excellent long-term buy-and-hold investment for all market environments.
silly takeaway
The ups and downs caused by volatile market environments can become irrelevant when you invest for the long term, as long as you can identify the right assets to buy and hold. BCE shares, Fortis shares and RBC shares are at the top of their respective industries.
All three businesses have strong operations, excellent financial performance and the ability to continue paying dividends to shareholders in difficult economic environments. These three dividend stocks can be great additions to your self-directed portfolio.
