As many investors have been told time and time again, dividend-paying stocks outperform non-dividend-paying stocks over the long term. It is for this reason that all long-term investors should own at least one dividend-paying stock, and in some cases, maybe even a diversified portfolio full of them. With this in mind, let’s take a look at three power stocks that have yields of up to 6.65% that you should consider buying today.
1. Northland Power Inc.: 6.65% yield
Northland Power Inc. (TSX:NPI) is one of the largest independent producers of wind, solar, and thermal power in Canada. It pays a monthly dividend of $0.09 per share, or $1.08 per share annually, giving its stock a 6.65% yield at today’s levels. It is also worth noting that Northland has paid out an annual dividend of at least $1.08 per share since 2006, and its consistent free cash flow generation could allow it to do so for the next several years.
2. Emera Inc.: 3.9% yield
Emera Inc. (TSX:EMA) is one of the largest electric utilities companies in North America. It pays a quarterly dividend of $0.40 per share, or $1.60 per share annually, which gives its stock a 3.9% yield at current levels. The company has also increased its annual dividend payment for nine consecutive years, and 2015 marks the first year of its five-year plan to grow its dividend by 6% or more annually, making it one of the top dividend-growth plays in the industry today.
3. Atlantic Power Corporation: 3.05% yield
Atlantic Power Corporation (TSX:ATP) is one of the largest power producers in the United States and Canada. It pays a quarterly dividend of $0.03 per share, or $0.12 per share annually, giving its stock a 3.05% yield at today’s levels. Investors should also note that the company reduced its annual dividend payment by 70% in September of 2014 after a “strategic review” of its business, but I think the current rate is sustainable for the long term.
Which of these power stocks should you buy?
Northland Power, Emera, and Atlantic Power are three of the best dividend-paying investment options in the utilities sector. All long-term investors should take a closer look and strongly consider establishing positions in one of them today.
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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.