There aren’t plenty of firms on the market that improve their dividend as a lot as Canadian Utilities (TSX:CU). In truth, it’s at the moment the solely firm on the TSX right this moment that’s elevated its dividend annually for the final 50 years!

That is definitely an ideal purpose to think about the dividend inventory, and in case you already personal it, I’m definitely not recommending you promote it. Nonetheless, there may be one other dividend inventory I like much more proper now.

Why not Canadian Utilities

In case you’re investing purely for dividends, then Canadian Utilities inventory may not truly be your best choice. Certain, you possibly can stay up for a rising dividend annually, and that’s nice. Nonetheless, how a lot is that dividend rising actually?

Canadian Utilities inventory at the moment has a compound annual progress price (CAGR) of 6.3% for the final decade. That definitely isn’t a foul quantity to develop annually. That dividend now comes out at $1.79 per share on an annual foundation.

As for share worth, nevertheless, that’s the place issues get a bit extra shaky. During the last decade, there was plenty of up and down for shares of this dividend inventory — a lot in order that shares are literally down 4% … in a decade!

That’s why I wouldn’t essentially suggest this Dividend King. Certain, it has strong passive earnings coming your means. However is that basically useful in case your returns aren’t doing a factor?

Take into account this as an alternative

Proper now, there’s a deal available in the case of Canadian banks. But of all of them, I actually like Financial institution of Montreal (TSX:BMO) — particularly in the case of dividends.

BMO inventory is the oldest of the Massive Six banks, having been round for over 200 years. In that point, the corporate has managed to broaden fairly quickly. In truth, it managed to try this once more just lately, the place it now operates in the US after buying Financial institution of the West.

BMO inventory additionally presents worth as a Canadian financial institution, because it’s a part of the Canadian banking oligopoly. There simply isn’t the competitors that we see in different areas of the world. Due to this, it continues to have provisions for mortgage losses to assist the corporate bounce again from financial downturns like this one.

That makes BMO inventory that’s a steal amongst dividend shares. It trades at 5.87 occasions earnings, with shares down 15% within the final yr. Nonetheless, shares are up 94% within the final decade. This brings it a CAGR of 6.9% within the final decade.

As for its dividend, it holds a yield at 5.03% as of writing. That dividend has risen by a CAGR of seven.4% within the final 10 years! So, you’re getting extra progress, each by way of passive earnings in addition to share worth.

Backside line

It’s undoubtedly greatest to think about all the pieces earlier than choosing up a dividend inventory. Whereas Canadian Utilities inventory definitely has lots going for it by way of passive earnings, it doesn’t in the case of precise returns. In the meantime, BMO inventory has strong progress by way of each dividends and returns in addition to a attainable large turnaround when the market recovers.