The Motley Fool

3 Top Dividend Stocks to Buy and Hold

They told her she was crazy when she started investing on her own, but their jaws dropped after she unveiled her fortune.

Anne Scheiber worked as an auditor at the IRS. She never earned a lavish salary. To stretch her income, she wore the same coat year after year and walked to work through the rain to save on bus fare.

In 1944, at the age of 50, Anne began investing her $5,000 life savings into wonderful businesses like Loews, PepsiCo, and Bristol-Myers Squibb. She was her broker’s worst customer because she never sold a share and hated paying commissions. But when Anne passed away in 1995, her initial investment had grown into $22 million.

Of course, Anne is an outlier, but her story reveals the secret to building wealth in the stock market: buy wonderful companies and hold on for the long haul. Even today, thousands of regular investors are using this strategy to grow their wealth.

So, in the spirit of Anne Scheiber, I have listed three dividend stocks that you could literally own forever. My advice is to buy em’, hold em’, and let these stocks make you rich.

1. Brookfield Infrastructure Partners L.P.

To most people, the Autopista Vespucio Norte (AVN) is just some freeway in Chile. To the keen investor, it’s one of the most valuable assets in the world.

The AVN is a profit machine. It’s the only way to and from the Santiago International Airport. If you’re shipping goods from the nearby Port of Valparaiso, you have to take this highway.

Cash flows are bulging. The booming economy means more trucks are needed to move products around the country. To curb congestion, AVN’s owners must hike tolls at rush hour.

While the AVN was expensive to construct, it’s not that costly to maintain. Once the road is built, it just sits there. Maintenance costs are only a tiny fraction of revenues; the rest can be paid out to owners.

In sum, the AVN is perfect for investors who want to earn steady dividend income. Unfortunately, you can’t invest directly in this highway. However, you can buy shares in the company that owns it: Brookfield Infrastructure Partners L.P. (TSX:BIP.UN)(NYSE:BIP).

In addition to the AVN, Brookfield operates dozens of infrastructure properties like ports, utilities, railways, and toll roads around the world. These are all irreplaceable assets that will be generating cash flow for decades to come.

2. Boardwalk REIT

Over the next century, there will be 15 or so bad years in the property market. We have no idea when they will occur, but people will always need to put a roof over their heads.

As a property owner through Boardwalk REIT (TSX:BEI.UN), you can receive a rent cheque each month. Those payments should more or less keep up with inflation. You can then plough those profits back into more buildings and earn yet more rent cheques.

Over that time, the goods and services your dollars can buy should grow multi-fold. Compare that to alternatives like cash, bonds, or GICs. Sure, they’ll never crash 50%. But after inflation and taxes, the purchasing power of your dollars is going down each year!

3. Bank of Montreal

The Bank of Montreal (TSX:BMO)(NYSE:BMO) hasn’t missed a dividend payment since 1829—almost 40 years before Canadian Confederation.

Let that sink in. Think about everything that has happened over that time—asset bubbles, two world wars, the Great Depression, and the OPEC oil embargo. Yet old BMO has continued to pay out a dividend to shareholders like clockwork.

It’s not hard to see why the bank has held up through all of these years. Thanks to Canadian conservatism, the company held up well in the last financial crisis. And given the cozy oligopoly that is the banking system in this country, BMO has little worry that competitors will eat into margins.

Simple, stable, lucrative. Investors who sit around patiently reinvesting their dividends will beat the pants off most other investors as the years tick by.

It’s a beautiful thing.

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Fool contributor Robert Baillieul has no position in any stocks mentioned. David Gardner owns shares of Lowe's. The Motley Fool owns shares of PepsiCo.

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