2 High-Yield Dividend-Growth Stocks to Buy Now

Are you in search of great dividend stocks? If so, Brookfield Infrastructure Partners L.P. (TSX:BIP.UN)(NYSE:BIP) and Genworth MI Canada Inc. (TSX:MIC) should be on your radar.

| More on:

If you’re on the hunt for great dividend stocks to add to your portfolio, then you’ve come to the right place. Let’s take a closer look at two +4% yielders that you could buy right now.

Brookfield Infrastructure Partners L.P.

Brookfield Infrastructure Partners L.P. (TSX:BIP.UN)(NYSE:BIP) is one of the largest owners and operators of critical and diverse global infrastructure networks. Its portfolio includes electricity transmission lines, natural gas transmission lines and storage facilities, rail tracks, ports, toll roads, and communication towers, which are located across North America, South America, Europe, Australia, and India.

Brookfield currently pays a quarterly distribution of US$0.435 per unit, representing US$1.74 per unit on an annualized basis, which gives its stock a mouth-watering 4.6% yield today.

It’s important to always confirm the safety of a stock’s dividend before investing, and you can do this with Brookfield by checking its distributions as a percentage of its funds from operations (FFO). In its fiscal year ended on December 31, 2016, its FFO totaled US$944 million (US$2.72 per unit), and its distributions totaled just US$628 million (US$1.55 per unit), resulting in a 66.5% payout ratio, which was within its target range of 60-70%.

With its high yield being confirmed as safe, the next important factor we will look at is Brookfield’s dedication to growing its distribution. It has raised its annual distribution in each of the last seven years, and its two hikes in the last eight months, including its 3.5% hike in August and its 10.6% hike last month, have it on pace for 2017 to mark the eighth consecutive year with an increase.

If having a high, safe, and growing distribution were not enough to have you salivating over Brookfield, then the fact that it has a distribution-growth program in place will. It has a long-term distribution-growth target of 5-9% annually, and I think its strong FFO growth, including its 3.9% year-over-year increase to US$2.39 per unit in 2015 and its 13.8% year-over-year increase to US$2.72 per unit in 2016, and its ongoing expansion efforts that will help fuel future FFO growth, including its roughly US$2.4 billion of capital that will be commissioned through 2020, will allow it to achieve this target into the late 2020s at the very least.

Genworth MI Canada Inc.

Genworth MI Canada Inc. (TSX:MIC), through its wholly owned subsidiary, Genworth Financial Mortgage Insurance Company Canada, is the largest private residential mortgage insurer in Canada. It provides mortgage default insurance to residential mortgage lenders, which makes homeownership more accessible to first-time homebuyers.

Genworth currently pays a quarterly dividend of $0.44 per share, representing $1.76 per share on an annualized basis, and this gives its stock a juicy 4.8% yield at today’s levels.

You can confirm the safety of Genworth’s 4.8% yield by checking its dividend payments as a percentage of its net operating income (NOI). In its fiscal year ended on December 31, 2016, its NOI totaled $388 million ($4.23 per share), and its dividend payments totaled just $156.1 million ($1.70 per share), resulting in a 40.2% payout ratio, which was within its target range of 35-45%.

Like Brookfield, Genworth offers dividend growth along with a high and safe yield. It too has raised its annual dividend payment for seven consecutive years, and its 4.8% hike in November has it positioned for 2017 to mark the eighth consecutive year with an increase.

I think Genworth’s dividend growth will continue in the years ahead as well. As mentioned previously, it has a target payout range of 35-45% of its NOI, so I think its consistently strong growth, including its 4.9% year-over-year increase to $4.05 per share in 2015 and its 4.4% year-over-year increase to $4.23 per share in 2016, and its growing asset base which will help drive future NOI growth, including its 6% year-over-year increase to $6.61 billion in 2016, will allow its streak of annual dividend increases to continue for another eight years or more.

Which should you buy today?

Brookfield Infrastructure Partners and Genworth MI Canada offer high, safe, and growing dividends, making them strong buys in my book. All Foolish investors should take a closer look at each and strongly consider investing 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.  Brookfield Infrastructure Partners is a recommendation of Stock Advisor Canada.

More on Dividend Stocks

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 »

Payday ringed on a calendar
Dividend Stocks

3 Dividend Stocks That Pay Me More Than $54.57 Per Month

These three dividend stocks have done me well over the years, so let's look at how much I've gotten in…

Read more »

Golden crown on a red velvet background
Dividend Stocks

Dividend Royalty: 3 Fabulous Stocks to Buy Now for Decades of Passive Income

Rogers Communications stock and Canadian Natural Resources stock could pay you dividends for decades to come.

Read more »

Dividend Stocks

The Top Canadian REITs to Buy in April 2024

For growth and dividends this April, look to these two REITs that have quite the promising present as well as…

Read more »