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When building your stock portfolio, you should always aim to keep your risks low. One of the best ways to do this is to add in some fundamentally strong dividend stocks that can continue to provide passive income despite temporary market ups and downs.
In this article, I’ll highlight two of the best Canadian dividend stocks to buy before the end of March 2023.
Canadian Western Bank stock
In March 2023, regional bank stocks experienced extreme volatility due to the collapse of California-based Silicon Valley Bank and New York-based Signature Bank. These bank failures spread fears of contagion throughout the global financial system and led to a sharp correction in bank stocks. However, most Canadian banks have a well-diversified business model with a proven track record of financial growth and a strong financial position. For that reason, the recent declines in some high-quality bank stocks could be an opportunity for long-term investors to buy them at a bargain price.
Canadian West Bank (TSX:CWB) could be one such attractive bank stock right now, offering an attractive annual dividend yield of 5.3%. Though 2023 started on a solid footing with a 17% gain in January, the stock currently trades without notable year-to-date declines due to the recent decline in bank stocks. That gives Canadian Western Bank a market cap of $2.3 billion as its stock price is around $24 per share.
To give an idea of the underlying strength of its financial growth trends, CWB has enjoyed a stellar five-year revenue growth of 48% between its fiscal 2017 and fiscal 2022. During the same period, its adjusted earnings also rose positively, up 41% to $3.62 per share, and emboldened management to increase the dividend per share by about 31%.
While economic challenges may temporarily slow the pace of its financial growth in the short-term, its long-term prospects for financial growth remain solid with its impressive cash position backed by a robust balance sheet.
TC Energy stock
Regardless of how reliable a dividend stock looks at the time of investing, you should always try to diversify your portfolio to minimize risk. That’s one of the reasons why the second Canadian dividend stock I want to recommend now TC energy (TSX:TRP), hails from the energy sector. Shares of this Calgary-headquartered energy infrastructure company are currently trading at $52.29 per share, down about 3% year-to-date. That gives it a market cap of $53.2 billion and an attractive annualized dividend yield of 7.1%.
TC Energy has nearly three decades of experience in the energy sector and currently has one of the largest natural gas networks in North America. In the five years between 2017 and 2022, the energy company’s revenue grew positively by 11.4% and adjusted earnings rose 39.2%, reflecting increasing profitability. In order to maintain the continued strong profitability and financial growth trend in the long term, the company plans to significantly expand its presence in the renewable energy and hydropower segments. Given the impressive prospects for long-term business growth, the recent declines in TRP stock could be an opportunity to buy it cheaply.
