2 Dividend Stocks to Buy in January 2024 for Safe Passive Income (2024)

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Consider adding these two safe dividend stocks to generate a passive income even while you’re asleep.

Achieving financial freedom is difficult through just the income you make at work. To truly achieve your financial goals, you must identify more ways to generate income. By putting the money you earn to work for you, you can unlock new ways to keep growing your wealth.

There is no shortage of methods to earn a passive incomein Canada. One of the most popular methods to do that is through stock market investing, particularly focusing on dividend stocks.

Dividend stocks are equity securities that pay their shareholders a share of their profits through quarterly or monthly payouts simply to reward them for holding shares of the company. There are plenty of dividend stocks trading on the TSX. However, not every dividend stock can be a good investment to generate a passive income in your investment portfolio.

To successfully create a passive income portfolio of dividend stocks, it is essential to identify stocks with strong underlying businesses. The company must have solid fundamentals and healthy cash flows that it can use to comfortably pay its shareholders their dividends.

Fortunately, the TSX boasts many high-quality dividend stocks you can consider adding to your portfolio for this purpose. Today, we will look at two of the best dividend stocks you can buy for safe quarterly dividends.

Fortis

Fortis Inc. (TSX:FTS) is a $26.3 billion market capitalization utility holdings company. Utility businesses are typically boring stocks that do not offer much in terms of capital gains during bull markets.

These stocks also manage to hold relatively steady during downturns when most other stocks see share prices decline. Fortis stock enjoys that stability due to a solid business model that generates predictable revenue.

Fortis operates several electric and natural gas utility businesses across Canada, the US, Central America, and the Caribbean. The company generates almost its entire revenue through long-term contracted assets in highly rate-regulated markets.

It can use the predictable cash flows to fund and grow its dividends and capital programs comfortably. As of this writing, it trades for $53.83 per share and pays its shareholders a juicy 4.38% dividend yield.

Bank of Nova Scotia

Bank of Nova Scotia (TSX:BNS) is another mainstay in many investor portfolios seeking long-term wealth growth through capital gains and dividend income.

The Canadian Big Five Banks have a reputation for being reliable long-term holdings in one of the most stable Canadian industries. When investing in Canadian bank stocks, you cannot go wrong with picking any of the Big Five. If I had to choose one, I would go for Scotiabank stock.

This $74.4 billion market capitalization bank stock is headquartered in Toronto and offers its investors exposure to banking in several international markets. With heavy headwinds impacting the sector, Scotiabank stock is down by 17.6% from its 52-week high as of this writing.

Well-capitalized enough to navigate the current slump to come out stronger, this should be of little concern to investors. Rather, its discounted share prices have led to an inflated 6.92% dividend yield that investors can lock in today.

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Foolish takeaway

Dividend investingis an excellent strategy to put your money to work in the stock market to make more money. What better way to kick-start a dividend investing portfolio than by picking two of the best dividend stocks?

Fortis stock is a Canadian Dividend King with a 50-year dividend growth streak. Scotiabank might not boast 50 years of consecutive dividend hikes.

However, its track record of paying its shareholders their dividends for almost two centuries cements it as a dependable dividend stock. If you are creating a dividend income portfolio, these two stocks can be solid foundations to help you get started.