Dividend Investors: 2 Stocks for Decades of Passive Income

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If you’re interested in passive income, there are several ways of generating that. However, in my opinion, the easiest way to do so is through dividend stocks. In short, these are stocks that pay shareholders on a regular basis for simply holding shares in the company. The best dividend stocks are able to increase dividend distributions over time. That helps investors stay ahead of inflation.

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In this article, I’ll discuss two of the best stocks for dividend investors today.

This is one of my favourite dividend stocks

As far as Canadian dividend stocks go, very few companies give me the same sort of confidence that Fortis (TSX:FTS) does. For those that aren’t familiar, Fortis is a utility company. It serves more than three million customers across Canada, the United States, and the Caribbean.

What makes this company even more interesting is that utility companies tend to operate on a recurring-revenue business model. That allows it to operate very stable businesses and even plan for dividend distributions far ahead of the actual date of payment. Fortis has done a very good job using that advantage over the years. In fact, it has used it to maintain a 49-year dividend-growth streak. That’s good enough for the second-longest active growth streak in the country.

That dividend-growth streak becomes even more impressive when you consider how many periods of economic uncertainty have occurred over that period. During the COVID-19 pandemic alone, many stellar dividend companies needed to halt increases or suspend dividend distributions altogether. In my opinion, if you’re only in the market for one dividend stock, Fortis deserves an honest look.

Make the banks pay you!

I’m sure everyone reading this article knows someone who’s been charged by the bank for one thing or another. However, did you know that banks have been paying Canadians for over a century? It’s true; some Canadian banks are actually nearing two centuries of continued dividend payments. So, if you’re interested in turning the tables and having a bank pay you instead, consider investing in a company like Bank of Nova Scotia (TSX:BNS).

Bank of Nova Scotia stands out to me because of its particularly long history of dividend payments. It first paid shareholders a portion of its earnings in 1833. Since then, the company has never missed a dividend payment. That represents 190 years of continuous dividend distributions.

In addition to that long history of dividend payments, Bank of Nova Scotia is noted for raising its distribution year after year. The company maintains a dividend-growth streak of more than 10 years. While it’s not nearly as long as the growth streak maintained by Fortis, it’s still quite impressive. Today, investors would be able to take advantage of a 6.19% forward dividend yield. If you’re ever looking at the banks, hoping to find a solid dividend stock, consider Bank of Nova Scotia.

The post Dividend Investors: 2 Stocks for Decades of Passive Income appeared first on The Motley Fool Canada.

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Fool contributor Jed Lloren has positions in Bank Of Nova Scotia and Fortis. The Motley Fool recommends Bank Of Nova Scotia and Fortis. The Motley Fool has a disclosure policy.