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Smart investors follow a simple philosophy: it’s not about timing the market; it’s about how much time you spend in the market. If you want to build significant wealth, you have to be a long-term investor.
If you don’t want to spend all day, every day analyzing your stock portfolio, you need to buy stocks that you can hold forever. It helps if these stocks are solid dividend payers as you will keep generating passive income irrespective of market conditions. Here are three of the safest dividend-paying TSX stocks right now.
TransAlta Renewables
TransAlta Renewables (TSX:RNW) is a renewable energy utility company that operates across Canada, the U.S., and Australia. It has a total capacity of 2,968 megawatts as of February 24, 2022. As the world increasingly moves towards renewable energy sources, the growth potential for TransAlta continues to expand.
It helps that TransAlta Renewables is a utility business with its contracts having an average life of around 12 years. It means the company has predictable revenues that help it to plan out its cash flows and deployments years in advance.
The stock is priced at $17.17 and boasts of a solid 5.5% dividend yield. If you invest in the stock now, there are solid chances that you can take advantage of capital–appreciation opportunities in the future. The stock is down 8.33% in 2022 and is down around 24% from its 52-week high, making it a top contrarian bet.
Emera
Emera (TSX:EMA) is another gas and utility stock with a handsome dividend yield of 4.4%. Emera is also one of the safest stocks on the TSX, with a beta of 0.28, which means it is relatively unaffected by market movements. Year to date, Emera shares are down 3.77% compared to the 11% drop of the broader TSX index.
Emera operates across six countries in North and Central America, and around 95% of its revenue is regulated. As long as the company continues to focus on efficiency, its cash flow is predictable. It’s little wonder the company is a Dividend Aristocrat.
Emera stock has appreciated by 28% in the last five years. After accounting for its tasty dividend payouts, total returns are closer to 62%.
North West Company
North West Company (TSX:NWC) is a retailer that operates in underserved communities in rural and urban Canada. It hardly has any competition in the regions where it operates. The company is a top consumer defensive stock, and it offers a solid dividend yield of 4.43%.
The company is excellent at controlling costs. And its razor-sharp focus on costs plus vertical integration means it is always improving its margins. The stock recently had a selloff after its profitability reduced significantly. But this reduction was due to inflationary costs that the company didn’t pass on to consumers.
NWC shares are currently priced at $33.63, and the average target for the stock is $39.2, which is a potential upside of 16.5%. Add in the dividend, and you have potential gains of over 20%.