Dividend seekers have long been spoiled by a large selection of high-yielding TSX stocks. Many Canadian stocks are staunchly committed to delivering value to investors through dividends.
However, the rough market conditions as of late have highlighted a few key things about dividend investing. For one, stocks with large but unsustainable yields will likely cut dividends during a rough patch.
This translates to a steep opportunity cost paid by the investor. While chasing a high yield may sound good in theory, dividend seekers may want to prioritize dividend stability and sustainability.
Today, we’ll look at two top TSX blue-chip stocks with juicy but reliable dividends. These stocks make for ideal options for a passive-income strategy.
BCE (TSX:BCE)(NYSE:BCE) stock is a heavy hitter when it comes to healthy dividend investing. The telecom giant is a holding company for the various Bell Canada companies, including Bell Media.
Through its various divisions, BCE offers a wide range of products and services. This affords it a wide moat of stable revenue sources and avenues for growth moving forward.
This all translates to a juicy and stable yield offered to investors. As of this writing, this option ideal for dividend seekers is trading at $57.18 and yielding 6.12%.
With a yield like that, it’s easy to get excited about BCE stock. That dividend dwarfs many of the yields on offer with other blue-chip stocks.
Plus, with 5G networks rolling out, and Shaw and Rogers combining, BCE has a bit of runway for growth in the cell service space.
Now, investors should be wary that the payout ratio for BCE is 132.67% as of this writing. While that doesn’t exactly sound sustainable, BCE has proven it has the resilience to ride out tough times.
Then, with things starting to turn around, investors can expect BCE to start posting encouraging figures going forward. As an elite TSX blue-chip stock, BCE can offer dividend seekers a clear path to great total returns.
Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) is a major Canadian bank with a strong international presence relative to its peers. While these international commodity-focused economies have been in tough recently, the growth potential moving forward shouldn’t be ignored.
Also, as a major Canadian bank, it’s impossible to argue against BNS’s dividend stability. Dividend seekers will be pleased to know that BNS has made consistent dividend payments every year since 1832.
Plus, it’s grown its dividend for most of that time and doesn’t seem like it will slow down. Even during the worst patches of 2020, BNS had more than enough cash flow to make the dividend work, with plenty of cushion and access to liquidity to spare.
As of this writing, this banking giant is trading at $79 and yielding 4.56%. As far as Canadian banks go, that’s a very solid yield and it’s backed up by a track record of phenomenal stability.
Dividend seekers looking to pick up a stock in the Canadian financial sector might want to take a closer look at BNS.
Strategy for dividend seekers
If you’re looking for healthy stocks with reliable and juicy dividends, both BCE and BNS fit the bill. Dividend seekers looking to add to their portfolios should give these stocks further consideration.
Speaking of consistent dividends…
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Jared Seguin has no position in any of the stocks mentioned. The Motley Fool recommends BANK OF NOVA SCOTIA.