Consider These 2 Dividend-Growth Stocks for Nov’23

The current economic environment is marked by bearish sentiments, with high inflation prompting banks to raise key interest rates. The S&P/TSX Composite Index, at the time of writing, has declined by over 10% from its 52-week high. In such challenging times, many investors seek ways to reposition their portfolios to weather a potential recession. While some opt for traditional safe-haven assets like gold, others, particularly seasoned investors, view market downturns as an opportunity to invest in dividend stocks, securing higher yields. Recessions are a cyclical part of the economic landscape, and with time, the market tends to recover. 

Diversifying your portfolio with dividend-paying stocks can be a wise approach, especially when considering high-quality, defensive companies that can withstand economic downturns. In this article, we will explore two TSX Dividend stocks with a long history of dividend growth, making them attractive options for recession-ready investments. 

Fortis: A Pillar of Stability 

Fortis (TSX: FTS) stands out as a highly defensive business, ideally positioned for recessionary conditions. This utility holdings company boasts a market capitalization of $26.75 billion and operates natural gas and electricity utility businesses in Canada, the United States, Central America, and the Caribbean. The majority of its revenue comes from highly rate-regulated markets, ensuring a stable and predictable cash flow. Although the utility sector may not experience robust growth during economic upturns, its reliability and stability become assets during volatile markets. 

Fortis is also a Canadian Dividend Aristocrat with a remarkable 50-year streak of dividend growth, one of the longest on the TSX. As of this writing, its share price is $57.99, offering a generous 4.29% dividend yield. Investing in Fortis provides an opportunity to add a cornerstone of stability to your portfolio, especially during uncertain economic times. 

Enbridge: Fueling Recession-Resistant Returns 

Enbridge (TSX: ENB) is another defensive business that should be on investors' radar during times of economic uncertainty. As a Canadian Dividend Aristocrat, Enbridge has consistently increased dividends for 28 years. With a market capitalization of $92.87 billion, it plays a significant role in the North American energy sector. Headquartered in Calgary, Enbridge owns and operates an extensive pipeline network for transporting hydrocarbons throughout Canada and the United States. 

To position itself for the future of greener energy, Enbridge has made substantial investments in renewable energy sources. Like Fortis, it provides essential services to the regional economy, ensuring that it can generate sufficient cash flows to sustain its dividend payouts even in a recession. 

Key Takeaway 

With impressive streaks of 50 years and 28 years for Fortis and Enbridge, respectively, these Canadian Dividend Aristocrats have proven their resilience through various recessions. They have consistently delivered returns to investors in the form of reliable dividend payments and long-term capital gains. 

While both Fortis and Enbridge present compelling opportunities for investors looking to build a recession-ready portfolio, it's important to consider your investment objectives and risk tolerance. Fortis, with its extensive track record, offers a high level of stability, making it an attractive choice for conservative investors. In contrast, Enbridge, while also an appealing dividend growth stock, may involve more risk due to its transition toward greener energy. Ultimately, your choice between these two stalwart stocks will depend on your specific financial goals and investment strategy. 

As we navigate through uncertain economic times, diversifying your portfolio with dividend-growth stocks like Fortis and Enbridge can be a smart move to help protect your investments and secure reliable income streams during recessions.