Passive Income: 3 Dividend Stocks (With Yields of at Least 4%) to Buy and Forget

Now is as good a time as any to think about building a stream of passive income. With volatility not looking like it will slow down just yet, an additional source of income could go a long way over the next few months. 

When it comes to building a stream of passive income, investing in dividend stocks is one of your best bets. There are plenty of dependable Dividend Aristocrats to choose from on the TSX — many of which are paying top yields right now after stock prices have dropped this year.

When it comes to choosing which dividend stock to invest in, you’ll want to look at more than just the yield. The company’s track record of dividend payouts should also be top of mind. In addition to that, dividend stocks may be able to provide a portfolio with more than just passive income, such as growth or defensiveness.

I’ve put together a basket of three top dividend stocks that any passive-income investor would be wise to have on their radar. Whether you’re a seasoned passive-income investor or completely new to dividend stocks, these are three companies that you can’t go wrong with owning for the long term.

Algonquin Power

At a yield currently above 5%, Algonquin Power (TSX:AQN)(NYSE:AQN) is the highest-yielding dividend stock in this basket. But a top yield isn’t the only reason to own shares of this company in a long-term investment portfolio.

Due to the company’s growing renewable energy division, Algonquin Power has been no stranger to delivering market-beating returns in recent years. Excluding dividends, shares are up 35% over the past five years. In comparison, the S&P/TSX Composite Index has returned less than 30%. 

And then there’s the defensiveness. Utility stocks tend to endure far less volatility than most other industries. So, if your portfolio tends to skew towards higher-risk companies, owning shares of this dependable utility stock would be a wise idea.

Toronto-Dominion Bank

The Canadian banks own some of the top yields and longest payout streaks on the TSX. You could do a heck of a lot worse than only investing in the big banks in a passive-income portfolio.

At a market cap of $150 billion, Toronto-Dominion Bank (TSX:TD)(NYSE:TD) is closing in on RBC as not only the largest Canadian bank but the largest company on the TSX.

At today’s stock price, TD Bank’s annual dividend of $3.56 yields 4.2%. 

You’ll sacrifice some yield for dependability with this dividend stock. But when it comes to passive-income investing, dependable slow-growing companies cannot be overlooked.


The last pick in this basket is the $40 billion telecom giant Telus (TSX:T)(NYSE:TU). 

In addition to a 4.5% yield, Telus has increased its dividend each year for more than 15 consecutive years. 

The telecom company has also been doing a strong job growing its presence in the healthcare space. That growth has been led by the company’s telehealth app, MyCare, which witnessed a massive boost during the pandemic.

With the telemedicine industry still largely in its infancy state, there’s no reason why Telus cannot continue paying a top yield in the coming decades while also putting up market-beating returns.

The post Passive Income: 3 Dividend Stocks (With Yields of at Least 4%) to Buy and Forget appeared first on The Motley Fool Canada.

Should You Invest $1,000 In Algonquin Power and Utilities?

Before you consider Algonquin Power and Utilities, you’ll want to hear this.

Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in August 2022 … and Algonquin Power and Utilities wasn’t on the list.

The online investing service they’ve run for nearly a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 27 percentage points. And right now, they think there are 5 stocks that are better buys.

See the 5 Stocks
* Returns as of 8/8/22

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Fool contributor Nicholas Dobroruka has no position in any of the stocks mentioned. The Motley Fool recommends TELUS CORPORATION.