3 Monthly Dividend Stocks to Buy for Your Grandchildren

Alaris Royalty Corp. (TSX:AD), Pembina Pipeline Corp. (TSX:PPL)(NYSE:PBA), and CT Real Estate Investment Trust (TSX:CRT.UN) can make your grandchildren rich. Which should you buy for them today?

| More on:

As Foolish investors know, dividend-paying stocks generate much higher returns than non-dividend-paying stocks over the long term. It is for this reason that I think dividend-paying stocks should be the primary holdings in portfolios that seniors build for their grandchildren. With this in mind, let’s take a look at three monthly dividend stocks with high and safe yields of 4-6% that could be bought today.

1. Alaris Royalty Corp.

Alaris Royalty Corp. (TSX:AD) is one of the leading providers of alternative financing solutions to private businesses across North America. It pays a monthly dividend of $0.135 per share, or $1.62 per share annually, which gives its stock a yield of about 5.8% at today’s levels.

It is also important to make two notes.

First, Alaris has raised its annual dividend payment for five consecutive years, and its recent increases, including its 3.8% hike in July 2015, has it on pace for 2016 to mark the sixth consecutive year with an increase.

Second, I think the company’s increased amount of net cash from operating activities, including its 20.8% year-over-year increase to $0.64 per share in its fourth quarter ended on December 31, 2015 and its 1.2% year-over-year increase to $1.65 per share in its fiscal year ended on December 31, 2015, will allow its streak of annual dividend increases to continue going forward.

2. Pembina Pipeline Corp.

Pembina Pipeline Corp. (TSX:PPL)(NYSE:PBA) is one of the leading transportation and midstream service providers to North America’s energy industry. It pays a monthly dividend of $0.16 per share, or $1.92 per share annually, which gives its stock a yield of about 5.6% at today’s levels.

It is also important to make two notes.

First, Pembina has raised its annual dividend payment for four consecutive years, and its recent increases, including its 4.9% hike on March 17, has it on pace for 2016 to mark the fifth consecutive year with an increase.

Second, I think the company’s increased amount of cash flows from operating activities, including its 6.3% year-over-year increase to an adjusted $2.53 per share in fiscal 2015 and its growing fee-for-service asset base, including its recently acquired natural gas-processing assets from Paramount Resources Ltd., will allow its streak of annual dividend increases to continue for the foreseeable future.

3. CT Real Estate Investment Trust

CT Real Estate Investment Trust (TSX:CRT.UN) is one of Canada’s largest owners of commercial real estate with 290 properties across the country. It pays a monthly distribution of $0.05667 per share, or $0.68 per share annually, which gives its stock a yield of about 4.8% at today’s levels.

It is also important to make two notes.

First, CT has raised its annual distribution for two consecutive years, and its 2.6% hike in November 2015, which took effect this January, has it on pace for 2016 to mark the third consecutive year with an increase.

Second, I think the company’s consistent growth of funds from operations, including its 9.8% year-over-year increase to an adjusted $0.808 per share in fiscal 2015, could allow it to announce another dividend hike at some point in 2016.

Should you buy one of these stocks for your grandchildren?

Alaris Royalty, Pembina Pipeline, and CT REIT can help put your grandchildren on the path to financial freedom, so take a closer look at each and strongly consider buying 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