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The TSX has a plethora of dividend stocks to choose from. Some of these stocks are good, some of these are bad, and some are just ugly. With interest rates surging in the past few years, several Canadian stocks have been forced to cut back their dividend payments.
Canadian investors need to be wary about stocks with elevated dividend yields. Any dividend higher than 7% should be scrutinized. A high dividend yield indicates a dividend (and business) at risk.
If there is doubt, it is best to just avoid these stocks. There is no point in collecting a big dividend if you rapidly lose capital value at the same time.
The best dividend stocks are those with solid balance sheets, defensive business characteristics, a history of earnings per share and free cash flow growth, and a steadily growing dividend.
These stocks may not have the highest yield, but they are ones you want to hold for decades. Here are three…
