There’re a lot of reasons to like dividend investing.
It doesn’t take a rocket scientist to understand. Studies have shown dividend stocks tend to outperform over the long haul. Better yet, it’s fun to own a piece of the companies whose products and services I use every day.
However, what is the No. 1 reason why I love dividend stocks? I like it when people hand me money. What could be better than watching a steady stream of cash be deposited into my brokerage account?
The problem is that many companies only pay you once a quarter. That might be OK for some investors. But for those of us who rely on dividend income to pay the bills, balancing quarterly payouts with monthly expenses can be a hassle.
However, there is a way around this issue. By researching payout schedules, it’s possible to find a combination of stocks that deliver dividends in different months. That way, you can scatter your payments throughout the year.
The end result is a portfolio that generates consistent cash flow. To help get you started, I have picked three top dividend names that are organized in exactly this fashion. With this basket of stocks, you should be able to collect a dividend cheque in each month of 2015.
January, April, July, and October
For a company that pays its quarterly dividend in the first month of the year, I recommend a traditional income favourite: Toronto-Dominion Bank (TSX: TD)(NYSE: TD).
Don’t dismiss this stock because of its meager 3.6% yield. TD is levered to growth in the United States, where the housing market is on the mend and the economy is rolling. As a result, this company should post more dividend hikes through 2015 and beyond.
February, May, August, and November
In spite of falling oil prices, Suncor Energy Inc (TSX: SU)(NYSE: SU) is still a source of reliable income. Management has always been committed to sharing profits with investors. However, since taking the helm in 2011, CEO Steve Williams has vowed to return even more cash to shareholders.
In just the past three years, he has doubled the size of Suncor’s payout and repurchased over 11% of the firm’s outstanding shares. Suncor typically announces its dividend policy at the start of each year. Analysts are looking for another distribution hike next spring along with an extension to the share buyback program.
March, June, September, and December
Loblaw Companies Limited (TSX: L) has been battling growing competition. As a result, the firm went seven years without a dividend hike between 2005 and 2012. But while you might not think grocery stores are the hottest investments around, there’re a number of reasons to be optimistic today.
Following the acquisition of Shoppers Drug Mart, the street is expecting Loblaw to trim costs by $300 million over the next three years. New products and store renovations should also boost profits. And given that management has raised its dividend twice over the past two years, it’s a sure sign that they see better days ahead.
Who else wants more dividend income?
Of course, these aren’t the only stocks that crank out reliable income. They’re just a few ideas to get you started. However, by identifying companies that stagger their payouts, you can collect a dividend cheque every month of the year. What could be better than that?
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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.