Many investors are turning to dividend stocks to supplement their monthly income.

This is particularly true among pensioners who would prefer to own GICs, but low interest rates have pretty much taken that option off the table. Fortunately, the market is serving up a wide variety of choices that offer decent yield and a chance to pick up some nice capital gains to boot.

Here are the reasons why I think income investors should consider A&W Revenue Royalties Income Fund (TSX:AW.UN), RioCan Real Estate Investment Trust (TSX:REI.UN), and Inter Pipeline Ltd. (TSX:IPL).


A&W is the number two burger chain in Canada. The company has more than 800 restaurants in the country and is rapidly expanding to meet the rising demand for its famous root beer and tasty burgers.

A&W was a popular hangout when boomers were young, and it remains a favourite with that same crowd 50 years later.

The company pays a monthly dividend of 12.5 cents per share that yields about 5.6%.


RioCan operates more than 300 retail properties in Canada and another 49 in the United States.

The stock has been under pressure over the past six months as investors have become concerned about the weakening Canadian economy, threats from online retailers, and rising interest rates.

RioCan’s core tenants are very strong companies such as groceries stores, pharmacies, and discount retailers. These businesses tend to hold up well during tough times because they sell the stuff people need on a daily basis. They are also relatively immune to online threats, because most Canadians still prefer to take the car to the store when they need to restock the kitchen, fill a prescription, or buy some new socks for the winter.

Rising interest rates can be a problem for REITs if the moves are large and occur over a short period of time. That isn’t likely to be the case in the U.S., and the next move in Canada is probably down.

RioCan recently announced the sale of its U.S. properties. The deal will provide net proceeds of $1.2 billion that management plans to use to pay down debt and invest in new opportunities.

RioCan pays a monthly distribution of 11.75 cents per share that yields about 6.1%.

Inter Pipeline

The oil rout has not been kind to Inter Pipeline’s stock, but the selloff looks overdone, and that is giving investors a chance to pick up a quality dividend at a very attractive price.

Inter Pipeline transports 35% of Canada’s oil sands output and 15% of western Canadian conventional oil production. The company’s customers are certainly feeling the pinch, but most are large operators with strong enough balance sheets to ride out the downturn.

Oil sands facilities will continue to run despite the weak oil prices because it is simply too expensive to shut them down.

The stock pays a monthly dividend of 13 cents per share that yields about 7.5%.  The payout ratio was 64% in Q3 2015, so the distribution should be safe, and investors could see a significant rebound in the shares when oil prices recover.

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Fool contributor Andrew Walker has no position in any stocks mentioned.