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Dividend stocks can provide a steady stream of passive income. But not all dividend stock are created equal. Investors should pay attention to certain characteristics when searching for dividend stocks.
Investors should make sure that their companies have strong moats in their industries. This will ensure that the company stays competitive over the next few years. Additionally, holding stocks with a long history paying dividends would be a good idea.
In this article, I’ll discuss two of the best options that investors could go for when looking to earn a regular passive income.
This bank is your chance to buy it today
If I had to choose one Canadian industry, it would have to be the banking sector. The Canadian banking industry is extremely regulated. The industry has a certain safety net because the banks that operate in it must follow strict regulations. This makes it hard for new banks to form, making it more difficult for the top companies to expand their already strong moats.
My top pick among the Big Five Canadian banks is Bank of Nova Scotia (TSX:BNS)(NYSE:BNS). This company’s focus on international presence is what interests me most. Bank of Nova Scotia realizes that Canada could be a significant market for future growth. It has therefore made conscious efforts to expand its international business segments.
Bank of Nova Scotia, which is well positioned in the Pacific Alliance has begun to see its investments pay off. The company’s latest earnings presentation revealed that net income for its international business segments increased 50% year over year.
Bank of Nova Scotia has been paying dividends to shareholders since 1833. This is 189 years worth of dividend payments. Today, the company’s forward dividend yield is 5.69%. This means that every dollar invested in Bank of Nova Scotia stock could bring investors a lot of value.
This stock is a top Canadian dividend stock
When discussing Canadian dividend stocks, it’s nearly impossible to omit Fortis (TSX:FTS)(NYSE:FTS). The company provides regulated electric and gas utilities to more that three million customers in Canada, the United States, as well as the Caribbean. Fortis, a utility firm, receives recurring revenue. This provides Fortis with a lot of stability even in the most difficult economic times.
It’s perhaps due to that recurring revenue that Fortis has managed to establish itself as a premier Canadian dividend stock. Each year, Fortis has been able to increase its dividend. past 47 years. Fortis has the second longest active streak of dividend-growth in the country. The ability to continually raise dividends is a characteristic that investors should look out for, because it helps ensure that your source of passive income doesn’t lose buying power over time.