Yahoo Finance My Top 5 Dividend Stocks for Passive Income Investors to Buy in August 2024
Written by Demetris Afxentiou at The Motley Fool Canada
Building out a passive income portfolio requires the right investments and a lot of patience. Fortunately, it’s not as hard as it would seem. The market is full of great options.
Here’s a look at five passive income options for investors to buy this month.
Start with a bank
Canada’s big banks are always great options to add. They can provide stable growth despite how the market fares, and pay out some of the best dividends on the market.
In other words, they are great options for investors looking to generate some passive income.
Bank of Montreal (TSX:BMO) is unique among its peers, making it the bank to buy right now in August.
BMO is the oldest of the big banks and has paid out dividends without fail for nearly two centuries. That’s an incredible amount of time, making it a very stable option to consider. That stability comes thanks to both the bank’s stable domestic arm in Canada, as well as a growing presence in the U.S.
BMO’s dividend works out to a juicy 5.3%, meaning that a $20,000 investment will provide an income of just over $1,000. Throw in annual upticks to that dividend and some growth, and you have a superb passive income option.
Add in some energy
Most investors are aware of Enbridge (TSX:ENB), but few realize just how lucrative an investment the energy infrastructure giant is.
In addition to its well-known pipeline business, Enbridge also operates a massive natural gas utility as well as a growing renewable energy operation across Europe and North America.
The result for all those segments is the same – a reliable (and growing) source of revenue. And that revenue stream allows it to invest in new growth initiatives and pay out a very handsome dividend.
That dividend works out to a juicy 6.9%, making it one of the better-paying dividends on the market. Using that same $20,000 example from above, investors can expect to earn an income of just shy of $1,400.
Oh, and let’s not forget that Enbridge has provided investors with annual generous upticks to that dividend for nearly three decades without fail.
Throw in a utility
As impressive as Enbridge’s string of three decades of increases are, Fortis (TSX:FTS) is a passive income stock that goes well beyond that point.
Fortis boasts a whopping five decades of consecutive annual increases. That makes the stock one of only two Dividend Kings in Canada. Adding to that appeal, Fortis plans to continue that tradition.
Utilities like Fortis generate a recurring and stable revenue stream that is backed by regulated long-term contracts. This not only provides a predictable revenue stream, but ample room to invest in growth initiatives for the long term.
Add a telecom
Telecoms represent another great option for passive income investors as they, too, offer a reliable and stable business model. Specifically, I’m referring to Telus (TSX:T).
In fact, the appeal of telecoms like Telus has only increased over the past few years. This is because the need for a fast and stable internet and wireless connection has become one of necessity.
Additionally, rising interest rates have pushed the otherwise defensive appeal of Telus and its peers into discount territory. This has propelled the yield on its dividend to an appetizing 7.1%.
Now that rates are beginning to drop, investors can expect Telus and its peers to return to growth.
Finish with a retailer
Yes, you did not read that wrong. One final passive income pick to consider adding is a retailer. More specifically, Canada’s retailer – Canadian Tire Corporation (TSX:CTC.A).
Most Canadians are aware of Canadian Tire’s namesake network of stores that blankets the country. Fewer may realize just how big the company’s reach is, and how many other well-known brands fall under its massive umbrella.
That list includes Party City, Sportchek, Mark’s, Helly Hansen, and several others.
Unlike other traditional retail stocks, Canadian Tire has embraced and invested in technology. This has helped the company excel while other retailers have stopped short.
It’s also helped Canadian Tire become one of the best dividend-earning stocks. As of the time of writing, Canadian Tire offers a 4.7% yield, making it a superb passive income option to consider now.
The post My Top 5 Dividend Stocks for Passive Income Investors to Buy in August 2024 appeared first on The Motley Fool Canada.
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Fool contributor Demetris Afxentiou has positions in Enbridge and Fortis. The Motley Fool recommends Enbridge, Fortis, and TELUS. The Motley Fool has a disclosure policy.
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