What’s up guys, it’s wiz.
Welcome back to the channel. If you are new, I am a Canadian investor. I cover a whole lot of information about investing in Canada and do research into our Canadian market. I dive into growth investing, dividend investing and Canadian small caps / penny stocks. Today, I will be going over 3 Canadian ETFs. These 3 dividend stocks offer safety and security in both returns and passive income especially for new Canadian investors who are just starting out. For new investors, you need to join Wealthsimple Trade if you are looking to start investing and live in Canada. If you use my link in the description to join Wealthsimple, you get 2 free stocks worth up to 4500$ so do not miss out.
Dividend stocks are some of the best ways to get into investing, especially as a new investor. These companies provide payments, even when returns aren’t doing so well. But that doesn’t mean you should be fine with little returns. That’s why today I’m going to focus on dividend stocks that are exchange-traded funds (ETF). ETFs are like having an entire portfolio hand-picked by a group of professionals with a solid goal in mind. In fact, that’s exactly what it is. So, I’m going to discuss three ETFs that have seen solid returns, and offer high dividends.
To start off, BMO Canadian High Dividend Covered Call ETF (ticker symbol :ZWC) is a great place to start among dividend stocks. It offers a yield of 7.2% right now, handed out monthly to its investors. Its top holdings are in energy and finances, providing a smooth path to growth. The company’s dividend has more than doubled over the last decade, so investors can also look forward to not just stable but growing dividends. And that’s while still having the protection of a low-volatility stock. Shares are up 13.52% in the last year and growing at a steady rate, even with all this volatility on the marketplace. ZWC ETF holds 35 Canadian dividend stocks from the financials, energy, telecom, utilities, and industrial sectors with a covered call overlay. For a $1,000,000 retirement portfolio and a dividend yield of 7.2%, this will create $72000 in annual passive income without having to sell any shares. The MER is also at 0.72%. However, this is still rather high compared to a “standard” ETF, since ZWC is a covered-call ETF requiring more active management. Great high dividend Canadian ETF to look over.
Next up we have iShares S&P/TSX Canadian Dividend Aristocrats Index ETF (ticker symbol CDZ). This company has a smaller yield, but that comes with the stability of knowing that yield will continue to be well placed for years to come, since it offers exposure to the highest-quality companies in Canada. The company narrows its focus only to Dividend Aristocrats. That means these dividend stocks have risen their dividend each year for the last 25 years. Canadian Dividend Aristocrats are high-quality companies with established operations that are not just consistently paying out their dividends, but they are consistently increasing them each year, too. You can pick up CDZ at a dividend yield of 3.07% currently. Furthermore, it too has risen a solid 10.7% over the last year. As for dividend growth, the company has increased that dividend by 50% over the last decade alone. So, on top of the fact that these are excellent stocks to own for years, you know they are highly reliable and safe businesses if they can continue to pay out more cash to investors each year. CDZ is a top Canadian dividend growth stock to add to the watch list.
Finally, Vanguard FTSE Canadian High Dividend Yield Index ETF (ticker symbol VDY) is similar to both the other dividend stocks, but gives you a nice middle ground. It has a high yield, but doesn’t just focus on Dividend Aristocrats so you get growth as well. That being said, it chooses its companies carefully to ensure payments keep coming in. Vanguard is one of the dividend stocks therefore offering a slightly higher 3.83% dividend compared to iShares and slightly higher growth at 25% compared to BMO. Perhaps this is due to its focus on Canadian stocks on the Financial Times Securities Exchange. But regardless, it’s one of the dividend stocks doing quite well. Meanwhile, its dividend has more than doubled by 121% in the last decade. VDY passively tracks the performance of 39 Canadian stocks characterized by high dividend yields and is heavily weighted in the financials (58.7%) and energy (23.4%) sectors, which is expected, given the huge amount of high-dividend-paying stocks represented there. Currently, VDY costs a management expense ratio (MER) of 0.20% to hold, which is costlier than broad indexes but not expensive for a specialty fund. The 12-month dividend yield stands at a respectable 3.83% currently. For a $1,000,000 portfolio, this means $38,300 in dividends every year! Great Canadian ETF to check out, VDY is the one I would pick out of the 3 ETFs I just went over.
Hope you guys enjoyed these 3 Canadian ETFs. You don’t have to get in on just one of the dividend stocks I showedt. And you don’t have to choose volatility over safety. These three ETFs offer stability, growth and passive income for new investors wanting it all. You could buy any or all three of these companies and be looking at stable growth for the rest of your life, but always make sure to do your own due diligence before buying. Please watch my previous videos on Canadian stock recommendations and let me know of any Canadian stocks you want me to look into and give my opinion on. Let me know in the comments, since I really want to expand my knowledge in the Canadian market, and you also expand your own knowledge by asking questions. If you did enjoy this video, leaving a like really helps grow the channel! Thanks for watching, I’ll see you guys in the next video!