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Despite the uncertainty in the Canadian stock market, investors still have plenty of options.
Particularly dividend stocks are attractive today. Dividend stocks with higher yields have been hit by the recent Canadian stock market decline. Combine that with attractive valuations and you have a very good time to invest quality dividend stocks.
While the yield will likely be top of mind when researching dividend stocks, it’s not the only characteristic to focus on. The company’s payout streak is also important, especially during times of instability, which we’re being faced with today. Dividend stocks can provide more than passive income.
I’ve reviewed two top dividend stocks worth serious consideration today. These companies offer unique advantages and are quite different from each other.
These two dividend stocks are an excellent place to start if you’re new to dividend investing.
Sun Life
Passive-income investors aren’t the only ones who should have Sun Life (TSX.SLF) (NYSE:SLF).
While a nearly 5% dividend yield is enough of a reason to land on any dividend investor’s watch list, I’ve got my eye on the insurance stock for two additional reasons.
First off, it’s the dependability that the company can provide an investment portfolio. Although the insurance industry is not exciting, it is reliable. I wouldn’t bet on the demand for insurance disappearing anytime soon.
Second, shares trade at bargain prices. The stock is down 20% year to date, but it’s the valuation that really makes Sun Life stand out. Sun Life investors get a lot for their money at a low forward price-to earnings ratio (below 10).
Northland Power
To complement Sun Life, I’ve included a very different type of dividend stock as my second pick for dividend investors.
A market cap close to $10 million makes it a very attractive company. Northland Power Canadian Stock Exchange (TSX.NPI) renewable energy leader. Company also has an international presence and offers a variety of green energy solutions to its customers.
Although Northland Power is indeed a different company than Sun Life, I was referring to their differences in terms the potential dividend stocks can offer investors.
At today’s stock price, Northland Power’s annual dividend of $1.30 per share yields just over 3%. It’s not among the lowest yields on the TSX, but Canadian investors won’t have much trouble finding a higher yield than that today.
The growth potential is what makes the stock stand out in this energy sector. Northland Power has been a consistent market beater for years, and I’m not banking on that changing anytime soon. Green energy companies are sure to benefit from the rising demand for renewable energy in the years ahead.
Northland Power shares have increased more than 70% in the past five year, even excluding dividends. That’s good enough for easily doubling the returns of the S&P/TSX Composite Index.
This company is for dividend investors who are willing to give up some passive income in exchange for market-beating growth.