There’s nothing quite like making money while you sleep and that’s essentially what you get with the best Canadian dividend stocks. Dividend stocks are public companies that pay their investors a portion of their profits in the form of a cheque either every three months or biannually.
Frequently Asked Questions
Yes. Generally, stocks that pay a dividend are your reliable, longstanding companies that would have to suffer apocalyptic losses to even have a chance of going out of business, so it’s extremely likely that your money is safe. However, some companies have been known to use their dividend payouts to placate investors when a stock isn’t moving and hide mismanagement. This means if you’re investing in a stock that pays a dividend, it may be pushing its dividend artificially to cover up a lack of growth. Therefore, it’s important to at least investigate how a company uses its dividend in its corporate strategy before investing. After all, usually a company that artificially pushes out it dividend while growth remains stagnant may soon cut its dividend program all together, which will send the stock plummeting.
Beyond the dividend stocks listed above, overall, good dividend stocks are usually stalwart companies that have existed in this country for over 100 years and cover sectors that are never going away, such as energy, utilities, financial services and telecommunications. Though shares in these companies are not cheap—given how reliable they have been as investments—once you are a shareholder, you usually reap nothing but rewards. One should approach stocks paying out a dividend without a solid, blue chip reputation for their brand, and many customers worldwide, with great scepticism because one has to wonder where the money to pay out the dividend is actually coming from in that scenario.
Investing in dividend stocks does take some research and due diligence, as well as an understanding of what a dividend is and how dividend stocks work (most dividend stocks pay out their excess profits to investors every three months, but some do so on a biannual basis) but the actual act of investing in them is easy. You can either contact your stockbroker or financial planner to invest on your behalf or you can use a reputable online discount brokerage like Wealthsimple Trade or Questrade to buy the shares yourself. Either way, the opportunity to invest in dividend stocks is readily available and highly accessible anyone with the money needed to buy shares.