3 Stocks With Yields of 4-6% to Buy Today

Searching for yield? If so, First Capital Realty Inc. (TSX:FCR), Northland Power Inc. (TSX:NPI), and Bank of Montreal (TSX:BMO)(NYSE:BMO) are very attractive options.

| More on:
The Motley Fool

One of the keys to success in investing is owning dividend-paying stocks, because as history shows, they outperform non-dividend-paying stocks over the long term. With this in mind, let’s take a look at three great dividend stocks with yields of 4-6% that you could buy today.

1. First Capital Realty Inc.

First Capital Realty Inc. (TSX:FCR) is one of Canada’s largest owners, developers, and managers of grocery-anchored commercial real estate with 159 properties that total approximately 24.6 million square feet of gross leasable area. It pays a quarterly dividend of $0.215 per share, or $0.86 per share annually, which gives its stock a yield of about 4.4% at today’s levels.

It is also important to note that First Capital has raised its annual dividend payment for four consecutive years, and I think its increased amount of funds from operations, including 2% year-over-year growth to an adjusted $1.03 per share in fiscal 2015, could allow for a slight increase at some point in 2016.

2. Northland Power Inc.

Northland Power Inc. (TSX:NPI) is one of Canada’s largest producers of thermal, wind, solar, and hydroelectric power. It pays a monthly dividend of $0.09 per share, or $1.08 per share annually, which gives its stock a yield of about 5.8% at today’s levels.

Investors must also note that Northland Power has maintained its current annual rate since 2009, and I think its consistent free cash flow generation, including $0.87 per share in the first nine months of fiscal 2015 and $0.85 per share in the first nine months of fiscal 2014, could allow it to continue to do so going forward.

3. Bank of Montreal

Bank of Montreal (TSX:BMO)(NYSE:BMO) is the fourth-largest bank in Canada and the eighth-largest bank in North America with approximately $641.9 billion in total assets. It pays a quarterly dividend of $0.84 per share, or $3.36 per share annually, which gives its stock a yield of about 4.5% at today’s levels.

It is also important to make two notes.

First, Bank of Montreal has raised its annual dividend payment for three consecutive years, and its recent increases, including its 2.4% hike in December 2015, has it on pace for 2016 to mark the fourth consecutive year with an increase.

Second, the company has a target dividend-payout range of 40-50% of net earnings, so I think its consistent growth, including 5.1% year-over-year growth to an adjusted $4.68 billion in fiscal 2015, will allow its streak of annual increases to continue going forward.

Which of these dividend stocks should you buy?

First Capital Realty, Northland Power, and Bank of Montreal are three great dividend-paying investment options. Foolish investors should take a closer look at each and 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

Two seniors float in a pool.
Dividend Stocks

TFSA: How to Earn $1,890 in Annual Tax-Free Income

Plunk these investments into your TFSA to earn passive income and avoid the taxman.

Read more »

Engineers walk through a facility.
Dividend Stocks

1 TSX Stock I Wouldn’t Touch With a 10-Foot Pole

AtkinsRéalis (TSX:ATRL) is one TSX stock I'd never invest in.

Read more »

edit Woman in skates works on laptop
Dividend Stocks

3 No-Brainer Stocks to Buy Under $30

These three stocks all offer a huge deal for investors looking for dividends, as well as growth that will last.

Read more »

You Should Know This
Dividend Stocks

How to Convert a $300 Monthly Investment Into $338 in Monthly Income

If you want a certain amount in monthly passive income, invest a similar amount today and leave the rest to…

Read more »

Increasing yield
Dividend Stocks

3 Income Stocks With Big Yields to Consider in April 2024

If you haven’t yet made your March investments, here are three income stocks to buy the dip and lock in…

Read more »

Senior Man Sitting On Sofa At Home With Pet Labrador Dog
Dividend Stocks

RRSP Investors: Don’t Miss Out on This Contribution Hack!

This hack has so many benefits for you -- not just when you put it in your RRSP but for…

Read more »

A red umbrella stands higher than a crowd of black umbrellas.
Dividend Stocks

Passive Income: 2 Safe Dividend Stocks to Own for the Next 10 Years

Dividend stocks such as Manulife and Fortis can help you generate a stable and recurring passive-income stream.

Read more »

Young woman sat at laptop by a window
Dividend Stocks

3 Dividend Stocks Everyone Should Own for the Long Haul

For investors looking for top-tier dividend stocks to buy and hold for the long term, here are three of my…

Read more »