Buying and holding dividend-growth stocks is one of the most powerful ways to ratchet up the long-term returns of your portfolio. With this in mind, let’s take a look at two with yields of 4-6% that you could buy right now.
National Bank of Canada
National Bank of Canada (TSX:NA) is the largest bank in Quebec and the sixth-largest bank in Canada as measured by assets with about $239.02 billion as of April 30. It offers a wide range of financial products and services to individual and corporate clients in Canada, the United States, and around the globe.
National Bank currently pays a quarterly dividend of $0.58 per share, equal to $2.32 per share on an annualized basis, and this gives it a yield of about 4.3% today.
On top of being a high yielder, National Bank is a dividend-growth star. It has raised its annual dividend payment for six consecutive years, and its recent hikes, including its 1.8% hike in December 2016 and its 3.6% hike last month, have it positioned for 2017 to mark the seventh consecutive year with an increase.
I think National Bank is a safe pick for high yield and dividend growth going forward too. It has a target dividend-payout range of 40-50% of its adjusted net earnings, so I think its very strong growth, including its 49.7% year-over-year increase to an adjusted $2.65 per share in the first half of fiscal 2017, and its growing asset base that will help fuel future earnings growth, including its 8.3% year-over-year increase to $239.02 billion in the first half, will allow its streak of annual dividend increases to easily continue into the late 2020s.
Brookfield Renewable Partners LP
Brookfield Renewable Partners LP (TSX:BEP.UN)(NYSE:BEP) owns and operates one of the world’s largest renewable power businesses. As of March 31, its portfolio consists of 260 predominantly hydroelectric power-generation facilities located across North America, South America, and Europe which have a total capacity of over 10,600 megawatts.
Brookfield currently pays a quarterly distribution of US$0.4675 per unit, representing US$1.87 per unit on an annualized basis, giving it a yield of approximately 5.8% today.
Like National Bank, Brookfield is a dividend-growth star. It has raised its annual dividend payment for five consecutive years, and its 5.1% hike in February has it positioned for 2017 to mark the sixth consecutive year with an increase.
Brookfield will continue to be a reliable source of high yield and distribution growth in the future too. It has a long-term distribution-growth target of 5-9% annually, and I think its very strong financial performance, including its 9.8% year-over-year increase in normalized funds from operations (NFFO) to US$0.45 per unit in the first quarter of 2017, and its strategic growth initiatives that will help fuel future NFFO growth, including its 6,000-megawatt development pipeline, will allow it to achieve this growth target for the next decade at least.
