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3 Dividend Stocks for Decades of Income

dividends grow over time
Source: Getty Images

Written by Amy Legate-Wolfe at The Motley Fool Canada

Investing in dividend stocks can provide you with a steady stream of income over the long term. These stocks are often considered a safe haven for investors seeking reliable returns. It makes them an attractive option for those looking to build wealth steadily. Among the plethora of choices available, blue-chip stocks stand out as some of the safest options for long-term dividend income. In this article, we’ll delve into the details of three blue-chip dividend stocks to consider.

BMO stock

Bank of Montreal (TSX:BMO) is one of Canada’s oldest and most trusted financial institutions. Founded in 1817, it has stood the test of time, earning its status as a blue-chip stock. BMO stock’s dividend history is equally impressive, with a consistent track record of dividend payments, even during economic downturns.

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As of the latest data, BMO boasts a robust dividend yield of 5.06%. Moreover, BMO stock trades at a relatively low valuation, with a price-to-earnings (P/E) ratio of 11.55. This suggests that BMO stock is attractively priced, offering good value for investors.

One of the key reasons BMO stock is considered a safe investment is its status as one of Canada’s Big Six banks. These financial giants are known for their stability and resilience, even in challenging economic environments. BMO’s strong balance sheet and prudent risk management practices further enhance its reputation as a reliable dividend stock. For investors seeking a combination of steady income and capital preservation, BMO stock is an excellent choice.

BEP.UN Stock

Brookfield Renewable Partners (TSX:BEP.UN) is a blue-chip stock that has been at the forefront of renewable energy investments since 1899. With a rich history spanning over a century, the company has evolved to become a global leader in renewable power generation and sustainable infrastructure.

One of the most compelling aspects of BEP.UN stock is its impressive dividend yield of 5.42%. This is notably attractive, given the company’s commitment to environmentally responsible investments. BEP.UN’s forward-thinking approach to renewable energy not only aligns with sustainability goals but also promises long-term growth potential in an era where green initiatives are gaining momentum.

It’s important to note that BEP.UN trades at a relatively high forward P/E ratio of 104. While this may initially seem expensive, it reflects the market’s optimism about the future growth prospects of the renewable energy sector.

BCE stock

BCE (TSX:BCE), Canada’s largest telecommunications company, has established itself as a blue-chip stock through its extensive history and dominance in the telecom sector. With roots dating back to the 19th century, BCE has consistently delivered reliable dividends to its shareholders.

What sets BCE apart is its generous dividend yield of 6.96%, making it one of the highest-yielding blue-chip stocks on the market. This level of income is particularly appealing to income-oriented investors who rely on dividend payments to fund their lifestyles or reinvest in their portfolios.

Despite its status as a dividend powerhouse, BCE stock trades at a reasonable P/E ratio of 22.19. This suggests that the stock is attractively valued, considering its solid dividend yield and position in the telecommunications industry. BCE stock’s dominant market position and recurring revenue streams from telecommunications services provide a level of stability that income investors can rely on.

Bottom line

Investing in blue-chip dividend stocks can be a smart strategy for those seeking long-term income and stability in their portfolios. In the world of investing, the key is diversification. By including these three dividend stocks in your portfolio, you can potentially enjoy decades of reliable income. Remember that while these stocks have strong histories and promising characteristics, it’s essential to conduct your research and consider your investment goals before making any decisions.

The post 3 Dividend Stocks for Decades of Income appeared first on The Motley Fool Canada.

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Fool contributor Amy Legate-Wolfe has positions in Brookfield Renewable Partners. The Motley Fool recommends Brookfield Renewable Partners. The Motley Fool has a disclosure policy.

2023