3 Top Dividend Stocks Yielding Up to 7.7%

Looking for income? Consider Pembina Pipeline Corp (TSX: PPL)(NYSE:PBA), Dream Office REIT (TSX: D.UN), and Bank of Montreal (TSX: BMO)(NYSE: BMO).

| More on:
The Motley Fool

If you want to invest in exotic mining companies panning for gold in Africa or the next hot technology start-up with unpronounceable buzzwords, then income investing isn’t for you.

However, if you want to buy good, old-fashioned businesses that actually make a profit, then you’ll like this strategy just fine. If you’re willing to trade being the talk of your next cocktail party for solid, long-term returns, then this approach to investing will suit you well.

The truth is, dividend investors may be a boring lot, but I’ll gladly trade excitement for consistent profits any day of the week. If you’re just starting to build your own income portfolio, here are three top dividend stocks to get you started.

1. Pembina Pipeline Corp

This might be the best income investment you’ve never heard of. Pembina Pipeline Corp’s (TSX: PPL)(NYSE: PBA) stock trades hands less than 500,000 times per day — just a tiny fraction of the trading volume for more widely held names. However, if you own a share of this business, you own a piece of some of the most valuable infrastructure monopolies in the world.

While you have probably never heard of Pembina Pipeline, this company is vital to your day-to-day life. The firm owns energy pipelines, terminals, and storage facilities throughout western Canada. Given that it’s almost impossible to build a competing business once this infrastructure is in place, Pembina is able to crank out steady profits year after year.

That’s good news for investors because Pembina passes on most of its profits to shareholders. Today, the company pays out a $0.14 monthly dividend to investors, which comes out to an annualized yield of 3.6%. With shale energy and oil sands production projected to surge over the next decade, I’d expect that dividend to continue growing.

2. Dream Office REIT

Owning investment real estate is a great source of income, but the truth is that becoming a landlord can be kind of a hassle. That’s why you might be interested to learn about a way to collect passive monthly income without buying any rental properties.

Dream Office REIT (TSX: D.UN) is one of the largest commercial landlords in the country, with 185 properties totaling nearly 28 million square feet of real estate. Because the trust is publicly traded, it can be bought and sold just like a regular stock. Today, the trust pays out a monthly distribution of $0.19 per unit, which comes out to an annual 7.7% yield.

Best of all, this payout is backed by high-quality tenants like the Government of Canada, BCE Inc., and Enbridge Inc. Needless to say, these tenants aren’t going out of business any time soon.

3. Bank of Montreal

Bank of Montreal (TSX: BMO)(NYSE: BMO) has pulled off the impossible. Since 1829 — three decades before Confederation — the company has managed to pay a dividend every year to shareholders. That’s the longest streak of any public company in North America.

Think of everything that has happened over that time — wars, depressions, and asset bubbles. For this company it hardly mattered. For 185 consecutive years, Bank of Montreal’s shareholders have been always able to count on a dividend cheque arriving in their mailboxes.

How has the company been able to pull this off? It was a combination of tall barriers to entry that kept competitors out of the industry and high switching costs keeping customers in the business. Given that all of these competitive advantages are still in place, Bank of Montreal is likely to continue paying dividends to shareholders for another century to come.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Robert Baillieul has no position in any stocks mentioned.

More on Investing

Oil pumps against sunset

Oil or Tech? Why Choose When You Can Get Both in a Single Stock?

Tech stock Pason Systems (TSX:PSI) is exposed to the energy market boom.

Read more »

A red umbrella stands higher than a crowd of black umbrellas.

Protect Against Inflation With 2 Top TSX Stocks

Here are two top TSX stocks that long-term investors concerned about inflation may want to consider in this time of…

Read more »

Woman has an idea
Tech Stocks

The Smartest Stocks to Buy With $20 Right Now and Hold Forever

These under-$20 stocks have the potential to grow further with time and deliver solid capital gains.

Read more »

A close up image of Canadian $20 Dollar bills
Dividend Stocks

TFSA Investors: Put $45,000 in These Top TSX Stocks and Watch Your Passive Income Roll In

Are you looking to retire early? Here are a few ideas about how your TFSA could earn a passive-income stream…

Read more »

Human Hand Placing A Coin On Increasing Coin Stacks In Front Of House
Dividend Stocks

Love Passive Income? Here’s How to Make Plenty of it as a Real Estate Investor

You could definitely create passive income by investing in pure real estate, but you could make just as much, if…

Read more »

Make a choice, path to success, sign
Dividend Stocks

2 High-Yielding Dividend Stocks You Can Buy and Hold for Years

These two high-yielding dividend stocks can be the perfect addition to your portfolio, as the bear market causes payout yields…

Read more »

A worker uses a laptop inside a restaurant.
Tech Stocks

Why Investors Shouldn’t Give Up on Shopify Just Yet

Here's why long-term investors may not want to throw in the towel just yet on e-commerce juggernaut Shopify (TSX:SHOP).

Read more »

Retirees sip their morning coffee outside.
Dividend Stocks

TFSA Wealth: How to Turn $88,000 Into $1 Million for Retirement

Canadians can use the TFSA to hold a basket of diversified equity investments, allowing you to turn a $88,000 investment…

Read more »