Investing in dividend stocks is one way that the average Canadian can generate massive wealth in the stock market. In my opinion, this is the safer route to take as opposed to taking a chance on risky growth stocks. In essence, you want to be very consistent in adding to your portfolio and hold exceptional companies for long periods of time. That will allow your portfolio to grow and generate a solid source of passive income for you in the future. In this article, I’ll discuss three top TSX dividend stocks to buy today.
This Dividend Aristocrat should be in your portfolio
When looking to invest in dividend stocks, Canadians should focus on Dividend Aristocrats. This is a term given to the best dividend stocks in Canada. It requires that a company raise its dividend distribution for at least five years in a row. There are many stocks that have managed to include themselves on that list; however, very few of those stocks have managed to maintain dividend-growth streaks of 25 years or more. Metro (TSX:MRU) is one of those stocks and a company that I think belongs in every dividend portfolio.
Metro is a name that many readers should be familiar with. Itâs one of the largest grocery chains in Canada, with annual sales exceeding $19 billion across its 975 food stores across the country. Metro has been paying shareholders a dividend since 1995. Ever since then, shareholders have seen those distributions grow each year. That represents 28 years of continued dividend raises. With a payout ratio of 28%, Iâm confident that Metro could keep those dividend raises going for many more years.
An underrated company
Sometimes, the best dividend stocks to hold are the companies that operate next door. Alimentation Couche-Tard (TSX:ATD) is an outstanding dividend stock that I feel many Canadians donât give fair consideration to. If youâre unfamiliar with this company, you may be surprised by the fact that you likely encounter its business very often in your everyday life, with some of its locations being very close to your home.
Alimentation Couche-Tard operates convenience stores under several banners; this includes its flagship namesake, Macâs, Circle K, Daisy Mart, On the Run, and many more. All considered, this company operates nearly 14,500 locations across 25 countries and territories. Itâs estimated that Alimentation Couche-Tard serves about 8.5 million customers per day. In terms of its dividend, Alimentation Couche-Tard has grown that 10-fold since 2013. That represents a compound annual growth rate of about 27%.
Invest in this top Canadian bank
Bank of Nova Scotia (TSX:BNS) is one of my favourite dividend stocks in Canada. This is largely due to its massive footprint on the Canadian and international banking industry. Aside from that, I find this companyâs dividend payment history to be one of the most impressive business feats ever.
No, it doesnât claim as long of a dividend-growth streak as Metro. Nor does it grow its dividend as fast as Alimentation Couche-Tard. However, Bank of Nova Scotia has been consistently paying shareholders a dividend for 190 years. A company like this could be massive in providing stability to your source of passive income.
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* Returns as of 10/10/23
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Fool contributor Jed Lloren has positions in Bank Of Nova Scotia. The Motley Fool has positions in and recommends Alimentation Couche-Tard. The Motley Fool recommends Bank Of Nova Scotia. The Motley Fool has a disclosure policy.