This post follows an inspiration I got from reading Dividend Diplomats’ post on Top 5 Foundation Dividend Stocks for a Portfolio. In their post, the Diplomats recommend five stocks that beginner investors can use as foundations of a long term portfolio. The post discusses various stages in the process to whittle down the selection and eventually settles on five companies – McDonalds (MCD), Procter & Gamble (PG), Johnson & Johnson (JNJ), Consolidated Edison (ED), and AT&T (T). These are all fantastic choices and I own shares in two of those companies (JNJ and T), and agree that these companies provide any beginner with a great foundation for dividend investing. In this article, I want to focus on Top 5 Canadian Foundation Stocks.
“Why?“, you may ask. If a beginner wants to invest in great companies, whats wrong with the stocks discussed above. Well, short answer is – nothing really. However, an investor may have plenty of reasons for picking Canadian stocks. For starters, a Canadian investor may be looking to build a portfolio in his/her Tax Free Savings Account or non-registered account, which provides better tax incentives for Canadian companies; or simply looking for familiarity of the companies (people like to invest in companies that they are familiar with, as they potentially understand how the business works, and feel more comfortable investing in them). An international investor could simply be looking for blue chip names in the Canadian market to gain some exposure. For this reason, I have put together my picks for the top Canadian stocks with dividends. Note that these are simply my picks, and each investor may lean one way or another and go with different companies. Please perform your own analysis and consult with your financial advisor before investing in any of the stocks mentioned here.