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Dividend Investors: 3 Stocks to Buy and Hold Forever

As most investors know, dividend-paying stocks far outperform non-dividend-paying stocks over the long term, and the top performers are those that increase their payments as often as possible. With this in mind, let’s take a look at three stocks with yields up to 4.5% that have increased their annual dividend payments for at least four consecutive years.

1. Bank of Montreal: 4.5% yield

Bank of Montreal (TSX:BMO)(NYSE:BMO) is the fourth-largest bank in Canada, with over $633 billion in total assets as of April 30, 2015. It pays a quarterly dividend of $0.82 per share, or $3.28 per share annually, giving its stock a 4.5% yield at today’s levels. The company has also increased its annual dividend payment for four consecutive years, and its increased amount of free cash flow could allow this streak to continue for another four years at least.

2. Cineplex Inc.: 3.3% yield

Cineplex Inc. (TSX:CGX) is the largest owner and operator of movie theatres in Canada. It pays a monthly dividend of $0.13 per share, or $1.56 per share annually, which gives its stock a 3.3% yield at current levels. Investors should also note that the company has increased its annual dividend payment for five consecutive years, and its consistent free cash flow generation could allow this streak to continue for the next several years.

3. Toromont Industries Ltd.: 2.2% yield

Toromont Industries Ltd. (TSX:TIH) is one of the largest dealers of Caterpillar equipment and one of the leading designers and manufacturers of industrial and recreational refrigeration systems in North America. It pays a quarterly dividend of $0.17 per share, or $0.68 per share annually, giving its stock a 2.2% yield at today’s levels. Toromont has the lowest yield of the three companies named in this report, but it is very important to note that the company has increased its annual dividend payment for 25 consecutive years, making it one of the top dividend-growth plays in the market today.

Which of these dividend growers should you buy?

Bank of Montreal, Cineplex, and Toromont represent three of the top dividend-growth plays in the market today. Foolish investors should strongly consider beginning to scale in to positions in one or more of them.

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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 Joseph Solitro has no position in any stocks mentioned.

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