3 Dividend-Growth Stocks With Yields of 3-5% to Buy Now

Bank of Nova Scotia (TSX:BNS)(NYSE:BNS), Methanex Corporation (TSX:MX)(NASDAQ:MEOH), and TransForce Inc. (TSX:TFI) have high dividend yields and active streaks of annual increases. Which should you buy?

| More on:

If you’re looking for a stock that has a high dividend yield and a track record of increasing its annual dividend payment, then look no further. I’ve scoured the market and selected three stocks from different industries that meet these criteria perfectly, so let’s take a quick look at each to determine which would be the best fit for your portfolio.

1. Bank of Nova Scotia

Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) is the third-largest bank in Canada with approximately $863.1 billion in total assets. It pays a quarterly dividend of $0.70 per share, or $2.80 per share annually, which gives its stock a yield of about 5% at today’s levels.

It is also important to make two notes.

First, Bank of Nova Scotia has raised its annual dividend payment for five consecutive years, and its recent increases, including its 2.9% hike in August 2015, has it on pace for 2016 to mark the sixth consecutive year with an increase.

Second, the company has a target dividend-payout range of 40-50% of its adjusted net earnings, so I think its consistent growth, including its 2.9% year-over-year growth to $7.2 billion in fiscal 2015, will allow its streak of annual increases to continue for the next several years.

2. Methanex Corporation

Methanex Corporation (TSX:MX)(NASDAQ:MEOH) is one of the leading producers and suppliers of methanol to major international markets in North America, South America, Europe, and Asia Pacific. It pays a quarterly dividend of US$0.275 per share, or US$1.10 per share annually, which gives its stock a yield of about 3.8% at today’s levels.

Investors must also note that Methanex has raised its annual dividend payment for five consecutive years, and its 10% hike in April 2015 has it on pace for 2016 to mark the sixth consecutive year with an increase.

3. TransForce Inc.

TransForce Inc. (TSX:TFI) is one of the leading providers of transportation and logistics services in Canada and the United States. It pays a quarterly dividend of $0.17 per share, or $0.68 per share annually, which gives its stock a yield of about 3.2% at today’s levels.

It is also important for investors to note that TransForce has raised its annual dividend payment for five consecutive years, and I think its increased amount of free cash flow, including its 19.7% year-over-year growth to $291.5 million in fiscal 2015, will allow it to continue this streak in 2016.

Would one of these stocks fit well in your portfolio?

Bank of Nova Scotia, Methanex, and TransForce are three of the most attractive dividend-paying investment options in their respective industries. Foolish investors should take a closer look and strongly consider initiating positions in at least one of them today.

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.

More on Dividend Stocks

Dividend Stocks

3 Dividend Stocks I’d Buy and Never Sell

Canadian National Railway (TSX:CNR)(NYSE:CNI) has many things going for it — the least of which is its history as an …

Read more »

Piggy bank next to a financial report
Dividend Stocks

TFSA Pension: 2 Top Stocks to Buy in a Self-Directed Retirement Fund

Canadian savers are using the TFSA to create their own retirement plan. Younger investors are building savings, while retirees are …

Read more »

Canadian Dollars
Dividend Stocks

Got $300? The 3 Best Passive-Income Stocks to Buy Now

A small but regular investment in top-quality dividend stocks could help you create a portfolio that will offer solid passive …

Read more »

Businessperson's Hand Putting Coin In Piggybank
Dividend Stocks

Top Stocks for Passive Income: How to Earn $366.75 Per Month Tax Free

Canadian pensioners and other investors focused on passive income have an opportunity to use their TFSA to hold top TSX …

Read more »

Payday ringed on a calendar
Dividend Stocks

2 Ways to Make $679 a Month in Passive Income

Passive income is defined as cash flow that’s enough to cover basic living expenses and is generated without any work. …

Read more »

Cogs turning against each other
Dividend Stocks

Boost Your Passive Income With These 3 Safe Dividend Stocks

With the inflation in the United States reaching a multi-decade high, Jerome Powell, the chairman of the Federal Reserve, has …

Read more »

money cash dividends
Dividend Stocks

3 Cheap Dividend Stocks That You Can Buy Under $30

The ongoing selloff provides long-term investors a chance to buy quality stocks at a lower price. Investors have seen a …

Read more »

Glass piggy bank
Dividend Stocks

RRSP Growth: 2 Top TSX Dividend Stocks to Own for Decades

The market pullback is giving RRSP investors a chance to buy some of Canada’s top dividend-growth stocks at reasonable prices. …

Read more »